TuSimple to Voluntarily Delist from Nasdaq After ‘Exhaustive’ Review
TuSimple’s time on Wall Street is coming to an end as the autonomous trucking company preps to wind down its U.S. operations.
The driverless technology firm is voluntarily delisting from the Nasdaq and terminating its registration with Securities and Exchange Commission (SEC) as it shifts gears to its operations in China and Japan. TuSimple plans to file the deregistration with the SEC on Jan. 29, and expects the last trading day of its stock to be Feb. 7.
More from Sourcing Journal
At the close of trading Monday, TuSimple stock was 44 cents per share, down 98.5 percent from its post-IPO peak of $62.58 per share in July 2021. While it raised $1 billion in the IPO, with a valuation topping $8 billion, the company’s market capitalization is now mere $110.8 million.
A special committee of independent board members made the decision for TuSimple after an “exhaustive” review process, determining that “the benefits of remaining a publicly traded company no longer justify the costs.”
TuSimple’s tenure as a public company has been rocky. The firm has been under the microscope in numerous probes from the SEC, the Federal Bureau of Investigations (FBI) and the Committee on Foreign Investment in the U.S. (CFIUS) after allegations that executives were improperly financing and sharing technology with a Chinese trucking startup.
The investigation led the TuSimple board to oust co-founder, CEO and chairman Xiaodi Hou in October 2022. The probes remain ongoing.
And that’s before getting to their financial results, which haven’t shown progress in building revenue, let alone profit.
The self-driving trucking technology company generated roughly $307,000 in sales for the first nine months of 2023, down more than 90 percent from the $7.5 million it reeled in the year prior. Fiscal year to date, TuSimple has incurred net losses of $220.7 million.
What has largely kept TuSimple afloat as it has conducted numerous layoffs and underwent two different reorganizations since Hou’s ousting, is its cash position. The San Diego-headquartered firm held $776.8 million of cash, equivalents and investments as of Sept. 30, 2023.
But a cash infusion has largely dried up since the IPO, with the special committee saying in a letter to shareholders that “there has been a significant shift in capital markets, due in part to rising interest rates and quantitative tightening that has changed investor sentiment for pre-commercialization technology growth companies.”
This lack of venture funding ultimately has impacted many businesses across logistics that have struggled to maintain profitability, with fellow autonomous trucking companies like Embark, Locomation and even Google’s Waymo Via winding down operations. Driverless vehicle companies felt the brunt of this as well, with Ford-backed Argo AI shutting down and General Motors’ Cruise cutting 24 percent of staff.
To raise money, TuSimple is auctioning off 10 autonomous big rigs later this month across two online auctions. The first is slated to run Jan. 23-25, and a second is scheduled for Feb. 6-8.
Although TuSimple is making its way out of the U.S., the company hasn’t ruled out the possibility of doing business in the market in the future, according to the committee.
“For now, we believe that market dynamics and the maturity of the APAC region’s supply chain allow for attractive commercialization opportunities,” the letter said. “In the past year, we have made significant progress, including being the first to pilot L4 autonomous trucks in Japan and first to conduct driver-out operations in China.”
This “L4” or level 4 self-driving technology is the stage at which long-haul freight trucks can safely operate without any humans involved.
The special committee also acknowledged that it could go public again in the future, but that it would evaluate based on the company’s development and market conditions.
“If we believe we can achieve attractive valuation in the public markets in the future, we would consider doing so,” the letter said.
If TuSimple didn’t delist from the Nasdaq themselves, the SEC was likely to act. The company’s shares have traded below the required $1 per share needed to stay on since November. The company already had been in danger of getting delisted after failing to report quarterly and annual results in time.
TuSimple still hasn’t given a concrete date for when it expects to cease operations in the U.S., but said in December it would be “substantially completed” by the end of 2024.
