Editor’s note: Updates 9th graf with closing share price
TuSimple Holdings shares, battered since announcing a sudden leadership change earlier in March, rebounded Wednesday after Reuters reported the autonomous truck developer may offload its autonomous trucking business in China.
TuSimple (NASDAQ: TSP), which leads the commercialization of autonomous trucking in the U.S., hasn’t talked much about its China business, which focused on deepwater ports near Shanghai. TuSimple is in talks to sell the unit for up to $1 billion, Reuters said, citing three individuals who confirmed the talks but were unauthorized to speak with the media.
The move follows the February signing by TuSimple of a National Security Agreement with the Committee on Foreign Investment in the United States (CFIUS) to shield intellectual property developed in the U.S. from China.
Also as part of the agreement, two directors representing Sun Dream Inc., an affiliate of China-based media conglomerate Sina Corp., said they would leave TuSimple’s board when their terms end. Sina also agreed to a standstill provision preventing further purchases of TuSimple stock, of which it holds about 20%.
TuSimple further agreed to periodically report to CFIUS through a government security committee to resolve U.S. authorities’ security concerns.
Watch now: TuSimple prepares the way for autonomous truck inspections
Reaching out
According to Reuters, the company has approached several Chinese investors, including private equity firm Boyu Capital, in its search for potential buyers.
TuSimple declined to comment to FreightWaves, saying it does not respond to speculation or rumors.
The report also follows a recent shake-up in top management. Founder and Chief Technology Officer Xiaodu Hou became chairman and CEO on March 3, an unexpected move that triggered a weekslong decline in TuSimple’s share price.
Shares recovered some of the losses Wednesday, closing $2.13 higher at $11.65, up 22.37%. They had sunk as low as $8.41 in recent weeks after touching nearly $80 last year. TuSimple went public in April 2021 via an initial public offering at $40.
The drop in the share price may have hastened the talks as TuSimple looks for ways to create shareholder value. The growth of TuSimple’s high-definition map-enabled autonomous freight network in the U.S. and pilot runs of driverless trucks in Arizona impresses Wall Street analysts, most of whom have “buy” ratings on the stock.
Unlocking value
But investors have gone the opposite way, driving shares about 75% lower since November.
“One could argue that the stock is not pricing in the value of the China market. Maybe there are ways to unlock some of that value,” said a person close to the situation who was not authorized to speak with FreightWaves.
TuSimple, founded by Hou and Mo Chen in 2015, operates a fleet of about 75 Class 8 Peterbilt and Navistar International trucks equipped with its high-autonomy Level 4 hardware and software. It booked more than $6 million in revenue in 2021 hauling freight for United Parcel Service and other customers in autonomous-equipped trucks with human supervision.
Last Dec. 22, TuSimple conducted its first “driver out” pilot, sending a truck 80 miles without a human driver on Interstate 10 from a railyard in Tucson, Arizona, to a depot in Phoenix.
It has repeated that feat several times and recently made driverless pilots a permanent program that will last until an autonomous International LT developed from the ground up with Navistar debuts in 2024. Those trucks will have no human driver on board.
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