How will the class-action lawsuit and 25% share drop affect short-term price volatility and trading volume?

The filing of a securities‑fraud class‑action suit in tandem with a 25 % plunge on a revenue miss will inject a burst of short‑term volatility and lift trading activity well above the stock’s average daily volume. Legally‑driven risk tends to attract both defensive sellers (who want to lock in cash before any potential settlement‑related price pressure) and speculative buyers hoping for a “buy‑the‑dip” rally if the case stalls or the company can quickly articulate a credible turnaround. Expect the bid‑ask spread to widen to 3–5 ¢ (or roughly 2 – 3 % of price) as market makers adjust for the heightened uncertainty, and intraday price swings of 4 %–6 % are realistic until the next substantive disclosure (e.g., a court filing, earnings guidance, or a corporate response).

From a technical standpoint, AI has broken key support around the $8‑$9 range and is now testing the $7.50 low‑volume zone. A clear retest of that level with volume exceeding 2‑3× the 30‑day average would suggest the market is absorbing the shock and could set up a short‑term bounce toward the prior $12‑$13 resistance. Traders could employ a tight stop‑loss (e.g., 2 % below the entry price) on any long entry around $8.00–$8.30, or alternatively look for short‑bias continuation patterns (e.g., breakdown below $7.50 with a sell‑stop around $7.30). In the near term, monitor any updates from the litigation docket or corporate communications; each new filing or statement is likely to trigger a spike in volume and a directional price swing, presenting both entry and exit opportunities for volatility‑focused strategies.