After the Nearmap Ltd (ASX: NEA) share price rocketed by as much as 14% today, it requested a trading halt. So, what’s happening to the Nearmap share price?
NEA share price
The ASX has placed a trading halt at the request of Nearmap so it can respond to the potential legal proceedings.
The company expects this trading halt to last until the commencement of trading on Friday, 7 May 2021.
These potential legal proceedings may stem from the short attack instigated by J Capital Research.
In the short report, J Capital noted Nearmap was, “in danger of losing its toehold in the U.S. insurance segment to an intellectual property challenge“.
J Capital was inferring that Nearmap may be infringing its US competitor, Eagleview in the way it produces roof measurements and roof reports in the US.
What now for Nearmap?
Any positive impact from the recently upgraded guidance has withered away.
I think it’s important to consider the opinions presented by the short report from J Capital and understand whether such claims are likely valid.
If it is in fact an intellectual property challenge, this could have severe consequences on the Nearmap’s brand and competitive advantage.
I would monitor these legal proceedings closely and review it with a fine-tooth comb.
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