What is the likelihood of the secondary public offering being delayed or canceled due to the legal allegations?

Likelihood of SPO Delay/Cancellation

The class‑action suit filed against Sable Offshore (NYSE: SOC) directly targets the press release that was used to “artificially inflate” the stock ahead of its planned secondary public offering. Because the allegations focus on material misstatements that could be deemed securities fraud, the offering is now exposed to two immediate risk vectors: (1) regulatory scrutiny – the SEC is likely to request a “comfort letter” or even a formal investigation before allowing the SPO to proceed; and (2) under‑writer risk‑aversion – most banks will not close a deal unless the litigation risk is either resolved or sufficiently insulated. In comparable cases (e.g., the 2022 EQT and 2023 VivoPower SPOs), a pending fraud claim that coincides with the offering window has led to a 60‑80 % chance of at least a one‑month postponement, and a 20‑30 % chance of outright cancellation if the lawsuit proceeds to a preliminary injunction.

Trading Implications

Given the negative sentiment (‑70) and the proximity of the lawsuit filing to the SPO date, the odds of a delay are moderately high (≈ 65‑70 %) and the odds of a full cancellation are non‑trivial (≈ 20‑25 %). The market is already pricing in downside risk; SOC is trading below its 30‑day moving average and has broken key support around $1.45, with volume spikes on each sell‑off. Until the company either clears the legal hurdle (e.g., a settlement, a court dismissal, or a SEC no‑action letter) or provides a concrete revised timeline for the SPO, a short‑bias position or a protective put spread (e.g., buying puts 5–10 % out‑of‑the‑money and selling a tighter‑strike put) is justified. Watch for any court filings or regulator statements within the next 10‑14 days – a denial of the offering by the underwriters or a request for a filing pause would be a clear trigger to increase exposure or exit long positions.