Why Wolfspeed Stock Soared Today
Shares of Wolfspeed (NYSE: WOLF) ripped higher today after the silicon carbide power-chip maker completed its court-supervised restructuring and emerged from Chapter 11 protection. The rally reflects relief that the balance sheet is now delevered and that the company can refocus on core silicon carbide capacity and key customers. Shares rose as much as 54.2% but were up about 48% as of this writing.
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Management indicated the restructuring reduced total debt materially and cut annual cash interest expense while extending maturities. Specifically, the company's total debt has been reduced by 70%, and maturities have been extended to 2023. Overall, the company lowered its cash interest expense by about 60%. This eases liquidity pressure that had weighed on operations earlier this year.
Source Fool.com
