TuSimple, the first autonomous trucking startup to go public, is voluntarily delisting from the Nasdaq, where its stock has been battered for more than two years and its boardroom strife played out for all to see.
Independent directors of the board chaired by co-founder Mo Chen announced the decision Wednesday in Securities and Exchange Commission filings. The SEC likely would have taken the action on its own since TuSimple shares have traded below the required $1 a share since mid-November. Shares plummeted 57% intraday to 30 cents.
TuSimple was the first autonomous trucking company to demonstrate driverless operations on an open highway. One of its trucks traveled 80 miles with no human on board from Tucson, Arizona, to Phoenix in December 2021.
Two startups — Aurora Innovation and Kodiak Robotics — plan limited commercial launches of driverless trucks later this year in Texas.
Flush with cash
San Diego-based TuSimple has been unwinding its U.S. operations, laying off almost its entire workforce while refocusing operations on China and Japan.
“The benefits of remaining a publicly traded company no longer justify the costs,” TuSimple said in a news release. “The company believes it can better navigate as a private company than as a publicly traded one.”
Unlike other transportation startups, TuSimple is relatively flush, reporting cash and cash equivalents of $776.8 million as of Sept. 30. The company caught up with required financial filings in November when it reported an operational loss of $248.6 million for the first nine months of the year.
The planned Feb. 7 termination of its common stock from the Nasdaq and the Jan. 29 deregistering and delisting mean TuSimple no longer would be required to file public documents about its business, such as SEC forms 10-K, 10-Q and 8-Ks, required when material changes occur.
TuSimple raised $1.1 billion in an initial public offering in April 2021.
“Since TuSimple’s initial public offering, 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.
“The company’s valuation and liquidity have declined, while the company’s stock price volatility has increased significantly,” the release said. At its peak shortly after going public, TuSimple traded at nearly $70 a share.
Long fall from autonomous trucking leadership
A long fall began in March 2022 when co-founder Xiaodi Hou took over as CEO and chairman, ousting Cheng Lu. Most of Lu’s executive team, including CFO Pat Dillon and Chief Legal and Administrative Officer Jim Mullen, departed in the following months.
An on-highway autonomous failure of a safety driver-monitored TuSimple truck on Interstate 10 near Tucson in April 2022 led to overhauling of safety systems and raised questions about the viability of autonomous trucks.
TuSimple’s problems worsened when directors voted Hou out as CEO in late October 2022. Lu returned as CEO and co-founder Mo Chen took over as executive chairman. He had stepped down in March. Chen and Hou together controlled about 60% of voting stock. Hou transferred his voting rights to Chen, who subsequently fired the independent directors who ousted Hou.
TuSimple and Navistar, which was developing a purpose-built autonomous chassis, ended a 2 ½-year collaboration in December 2022. That was the same month TuSimple laid off 350 workers, followed by 300 more in May 2023.
Strategic review pivots TuSimple toward Asia
The company announced a strategic review of its U.S. business in June. In December, it announced a wind down of U.S. operations, laying off an additional 150 employees.
A new slate of independent directors formed a special committee that decided on the voluntary delisting and taking the company private. Chen agreed to a two-year standstill provision that prevents him from making any TuSimple transaction, such as a sale, without independent directors agreement.
TuSimple was threatened with Nasdaq delisting last year because of its delinquent financial reporting. The company blamed the delay on changing auditors. KPMG quit as TuSimple’s auditor amid the messy boardroom shakeup.
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