At one point on Thursday, Proterra (NASDAQ:PTRA) was up almost 20%. While PTRA stock still closed up by about 3% on the day, the pullback from its highs has bulls a bit disappointed.
That said, the stock is still running at full steam ahead. Shares finished higher on the day, marking the stock’s fourth-straight daily rally and ninth daily gain in the last 10 sessions. From the low on July 6 to today’s high, PTRA stock has climbed more than 64%.
Despite the stock’s robust gains, though, Proterra still faces shareholder lawsuits. These are just a few of the headlines from July 19:
“Robbins LLP reminds investors that a shareholder filed a class action on behalf of all persons and entities that purchased or otherwise acquired Proterra […] securities between August 2, 2022 and March 15, 2023.”
“The Schall Law Firm, a national shareholder rights litigation firm, reminds investors of a class action lawsuit against Proterra […] for violations of §§10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder by the U.S. Securities and Exchange Commission.”
“On March 15, 2023, Proterra announced their quarterly earnings. In that announcement, the Company stated they were in violation of a liquidity clause in their secured convertible notes and that they may have to qualify an audit report with a ‘going concern’ clause.”
This is not the type of news investors like to see. And yet, PTRA stock flew higher today. Well, at least shares have in the short term. In the long term, it hasn’t been quite as rosy of a picture.
What Does This Mean for PTRA Stock Going Forward?
While shares have performed well on a day where other electric vehicle (EV) stocks are selling off — mostly due to the earnings reaction in Tesla (NASDAQ:TSLA) — Proterra has struggled this year.
Even with the recent rally, shares are still down almost 60% so far this year. Over the last 12 months, PTRA stock is down almost 70%. When the company reported earnings in March, the stock suffered a one-day decline of more than 53%.
Insider sales from the CEO and Chief Financial Officer in January didn’t help sentiment, even if it was only in hindsight.
At this stage of the game, it may be more meaningful for investors to worry more about the company’s mention of “going concern” than the lawsuits.
The Schall Law Firm summed it up nicely, saying Proterra made “false and misleading statements” and “repeatedly communicated to the market that it enjoyed strong liquidity and robust stability.” Now that the market has allegedly “learned the truth about Proterra,” the stock price has taken a painful hit.
In fact, today’s high of $1.83 per share is 1 cent below the post-earnings high from March 15. In other words, pre-earnings buyers are nowhere near erasing their losses despite the recent rally.
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On the date of publication, Bret Kenwell did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
