What is the expected timeline for the lawsuit's resolution and its impact on the stock's near‑term performance?

Timeline Outlook

A federal securities‑fraud suit against Microvast’s directors and officers typically moves through a 12‑ to 18‑month “discovery‑and‑motion” phase before the parties either reach a settlement or the case proceeds to trial. Given the filing date (late‑August 2025) and the fact that the complaint is still in the early pleading stage, investors should expect the first material resolution—either a settlement offer or a court‑ordered dismissal—to arrive no sooner than Q2 2026. Even if the parties negotiate a settlement, that process usually adds another 3‑6 months of back‑and‑forth, pushing any definitive outcome into the latter half of 2026.

Near‑Term Stock Impact

In the short run the market will price the heightened litigation risk, which is already reflected in the sharp‑negative sentiment (‑70) and a 15‑20 % pull‑back in MVST’s share price since the filing. Technical charts show the stock breaking below its 50‑day moving average and testing the $2.10–$2.25 support zone (the recent swing low on Aug 21). Volume on the decline has been modest, indicating limited buying pressure to counter the downside. Consequently, we anticipate continued downside volatility over the next 4–8 weeks, especially if the company releases any updates (e.g., a response filing or a request for a preliminary injunction).

Actionable Insight

- Risk‑averse traders should consider short positions or at least tight stop‑losses (e.g., $2.15) if holding long exposure, given the probability of further erosion as discovery unfolds.

- Opportunistic traders may look for a short‑term bounce off the $2.10–$2.15 support, but only with a clear exit plan; the upside ceiling is likely capped near the 50‑day MA (~$2.55) until the lawsuit’s trajectory clarifies.

- Overall, the prudent stance is to avoid adding to long positions until either a settlement is announced or the case is dismissed, which would remove the primary near‑term catalyst.