What is the likelihood of a settlement versus a court ruling, and how might each scenario impact the stock price?

Likelihood of a settlement vs a court ruling

In securities‑fraud cases that involve a defined “class period” and a clear list of affected investors, companies and law firms often prefer a settlement because it caps legal exposure, avoids a protracted discovery process, and limits the risk of a damaging judgment. Given that Rosen Law Firm has already identified the class of purchasers and is urging a collective action, the probability of a settlement is roughly 60‑70 %. A full court ruling—especially a jury verdict—carries a higher upside for the plaintiffs but is less common in these types of class‑action suits, so we estimate a 30‑40 % chance of a definitive trial outcome.

Potential price impact

• Settlement scenario: The market will likely view a settlement as a “damage‑control” move. If the terms are modest (e.g., a cash payment that is a small percentage of market cap), the stock could rebound quickly, trimming the current 5‑7 % discount that the negative‑sentiment press release created. Expect a 2‑4 % upside on the day of the settlement announcement, followed by a short‑term bounce as investors re‑price the reduced legal risk.

• Court ruling (adverse verdict): An unfavorable judgment—especially one that imposes a sizable monetary award or opens the door to further litigation—could trigger a sharp sell‑off, potentially wiping out 8‑12 % of the share price in the next 1‑2 weeks. Even a neutral or favorable ruling (e.g., dismissal) would still leave the market wary of lingering exposure, limiting upside to 1‑2 % and keeping volatility elevated.

Actionable take‑away

With the lawsuit still pending and the sentiment at –70, the stock is currently under pressure. Until settlement terms are disclosed, a short‑position or a tight‑‑stop‑loss long (if you already own) is prudent. Watch for any filing of a settlement agreement or a motion to dismiss in the next 7‑10 business days; a confirmed settlement should be treated as a catalyst for a short‑term bounce, while a court‑date set‑up for a trial will keep the downside risk intact.