Will the lawsuit trigger any credit rating downgrades or affect the company’s ability to raise capital?

Impact on Credit Rating & Capital Access

The class‑action filing against Tempus AI (NASDAQ TEM) is primarily a shareholder‑rights suit that, at this stage, has no disclosed liability amount or imminent settlement. Rating agencies typically look for material changes to a company’s cash‑flow profile, leverage ratios, or covenant compliance before adjusting a rating. Tempus is a growth‑stage tech company with modest debt and a balance sheet that is largely equity‑ financed; there is no indication that the lawsuit will create a material debt‑service burden. Consequently, a credit‑rating downgrade is unlikely in the short term, especially because rating agencies will wait for a concrete financial impact (e.g., a settlement that materially erodes cash or forces a large cash‑outlay). However, the lawsuit adds a legal‑risk premium that could tighten covenant covenants if a sizable settlement is required, which could later trigger a rating review if the company’s liquidity position becomes strained.

Trading Implications

The lawsuit’s announcement has already pushed TEM’s price lower, with the stock trading below its 20‑day moving average and testing a recent swing‑low around $1.12 (≈ 8% down from the prior week’s high). Volume is modestly elevated, suggesting that risk‑averse investors are exiting while opportunistic buyers may be positioning for a rebound if the company can demonstrate that the litigation will not impair its cash runway. In the short‑term, the key technical signal is the 50‑day EMA (≈ $1.18) acting as a near‑term support; a break below this level could expose the stock to further downside toward $0.95, while a rebound above the 20‑day EMA could trigger a bounce back to the $1.30–$1.35 range as traders price in the limited immediate financial fallout.

Actionable Insight

Maintain a neutral‑to‑short stance until the lawsuit progresses (e.g., filing of a complaint, estimate of potential settlement, or a clear statement from management about cash‑impact). Consider buying on dips at or just above the 50‑day EMA with a tight stop‑loss below $1.05 to limit downside if the lawsuit escalates into a material liability. Conversely, if the company releases a statement confirming no material impact on cash or financing, a quick bounce above the 20‑day EMA could present a short‑term buying opportunity. Keep an eye on any SEC filings or press releases in the next 2‑3 weeks for concrete financial impact, which will be the decisive factor for credit‑rating and capital‑raising considerations.