Microvast Shares Plunge Amid Legal Scrutiny and Analyst Downgrades

Microvast Holdings saw its stock value plummet nearly 9% during Friday's trading session, closing at $5.83 per share. This significant decline follows concerning developments in ongoing legal proceedings and negative revisions from financial analysts. A recent Sunday report indicates the battery manufacturer is now under "intensive scrutiny" as investigators examine potential financial irregularities.

Legal pressures continue to build for Microvast, with authorities investigating potential regulatory violations concerning undisclosed financial activities. The probe focuses specifically on questionable sales transactions and operational inactivity at key international manufacturing facilities. These allegations align with previous accusations regarding fraudulent sales practices and unreported subsidy losses.

The investment research community has responded to these developments with increased caution. Weiss Ratings maintained its "Sell" recommendation in October, while Zacks Research downgraded its assessment from "Strong Buy" to "Hold." The current consensus among market analysts now stands at "Hold," with an average price target of just $3.00—significantly below current trading levels.

Should investors sell immediately? Or is it worth buying Microvast Holdings?

Financial Performance Contrasts With Operational Challenges

Despite the growing legal concerns, Microvast reported record-breaking second-quarter 2025 revenue of $91.34 million, accompanied by an adjusted EBITDA of $25.9 million. However, these positive operational metrics were overshadowed by a GAAP net loss totaling $106.1 million, highlighting persistent profitability challenges that continue to trouble the company.

From a technical analysis perspective, Friday's trading activity generated a sell signal following the formation of a pivot top point on October 16. Market technicians suggest the downward trend may persist until the stock establishes a new support level. All eyes now turn to the upcoming quarterly earnings release scheduled between November 7 and 17, which will reveal whether the company's operational strength can counterbalance its mounting legal difficulties.