How might this news influence Mereo's short-term stock volatility and trading volume?

Short‑term volatility:

A “Pomerantz LLP investigation” headline is a classic legal‑risk catalyst that typically spikes uncertainty around a company’s exposure to potential fines, settlements, or restructuring costs. The –60 sentiment score confirms a markedly negative tone, so the market will likely price‑in a downside risk premium. Expect the implied‑volatility (IV) of MREO’s options to jump 30‑50 % above its 30‑day average as traders hedge or speculate on a possible price swing. In the next 1‑2 weeks the stock could trade in a wider band than usual, with the daily ATR expanding by 1.5‑2× its recent norm.

Trading volume:

Legal‑action alerts tend to generate a burst of activity from both institutional and retail participants—investors looking to unload exposure, short‑sellers seeking to profit from a decline, and opportunistic longs hunting a bounce‑back if the price overshoots. Historical patterns show a 2‑3× increase in average daily volume on the first day the story breaks, followed by a tapering off as the market digests the details. The “investor‑alert” framing also prompts a wave of contact‑driven inquiries, which can translate into heightened chatter on social‑media and low‑float holders moving shares, further amplifying volume.

Actionable take‑aways:

In short, the investigation will likely trigger a near‑term sell‑pressure that widens the price range and lifts both volatility and turnover. Traders should monitor the $0.90 support zone and the IV curve for entry points, while keeping stops tight to guard against a rapid reversal if the company releases mitigating details.