Sep. 29 at 10:14 PM
$FSRNQ 4. What the New Shares Mean (Why the Ticker Didn't Change)
* New Financial Structure: Wolfspeed is now emerging from bankruptcy with a significantly lighter debt load (reported to be cut by approximately 70%) and a stronger balance sheet. This new structure is meant to allow the company to be profitable moving forward.
* Same Ticker (
$WOLF): The company chose to keep its ticker symbol. This is sometimes done to maintain brand recognition, but it can be confusing for investors, as the price of the stock now reflects the value of the new company and the new, reduced number of shares.
* The Price Surge: When a company emerges from Chapter 11 with significantly less debt, the valuation of the new stock can surge because the financial risk has been removed. However, the gains are based on the new stock, and the old shareholders had a tiny, diluted stake in that new stock.
In summary, for the previous stockholder: