What: Shares of Cree (NASDAQ:CREE) were down 11.4% as of 11 a.m. Thursday after the LED lighting specialist announced a major business restructuring plan in reaction to disappointing LED market trends.

So what: Specifically, in response to "market trends that have caused higher LED average selling price erosion and the continued under-utilization of Cree's LED factory," Cree is restructuring its LED Products business to improve its cost structure while reducing excess capacity and overhead. Cree is also increasing LED reserves to reflect this aggressive pricing, and to factor in a more conservative pricing outlook for the full fiscal year. This will result in restructuring charges of roughly $85 million, with the bulk to be recognized in the current quarter ending June 28, 2015. 

In addition, Cree now expects current-quarter revenue of $375 million -- compared to its previous target for revenue of $420 million to $440 million -- including a $27 million channel revenue reserve within the aforementioned $85 million in restructuring charges.

Now what: To its credit, Cree attempted to appease investors by simultaneously announcing it has authorized a $500 million stock buyback for fiscal year 2016. This comes on the heels of Cree's now-completed $550 million buyback program for fiscal 2015, which was completed in the current quarter by repurchasing 4.8 million shares for roughly $160 million, or an average price of $33.37 per share.

At the same time, that's little solace to investors considering the stock now trades around $27 per share. And while Cree can certainly continue to buy back stock at what might seem a discounted price, shares don't look particularly cheap trading around 60 times trailing-12-month earnings and 21 times next year's estimates. Considering those estimates are almost certain to fall as analysts have time to digest today's restructuring and reduced forecast, I'm content watching Cree from the sidelines for now.