TSP.US

The autonomous driving company said its decision was based on weakening market sentiment towards companies with technology that has yet to be commercialized

  

By Doug Young

TuSimple Holdings Inc. (TSP.US) said on Wednesday it has decided to voluntarily delist its shares from the Nasdaq, ending its nearly three-year run on Wall Street, following a series of negative developments that caused its stock to plunge starting in late 2022.

The company was once a leader in autonomous driving technology for big-rig trucks, and appeared well positioned to become one of the world’s first companies to commercialize its product. But it later ran into headwinds due to questionable corporate governance. As that happened, its stock plunged from as high as $62 at the height of its popularity in June 2021 to below $1.

The stock continued to plunge after the new delisting announcement, losing nearly half of its value to close at about $0.38 on Wednesday.

In making its decision, TuSimple said a special committee of its board considered a number of factors. It said rising interest rates and quantitative tightening have “changed investor sentiment” for companies like itself with new technologies that have yet to be commercialized.

“The company’s valuation and liquidity have declined, while the company’s stock price volatility has increased significantly,” it said.

As a result of those factors, TuSimple said the special committee “determined that the benefits of remaining a publicly traded company no longer justify the costs,” and made the decision to delist its shares. It said it intends to inform the U.S. securities regulator of its plan around Jan. 29, and expects the final trading day for its shares will be around Feb. 7.

TuSimple has operations in both the U.S. and China, and was developing its autonomous driving technology for both markets.

Its problems began when the U.S. national security regulator expressed concerns about the company’s China ties, as all of its founding members are from China. Later, TuSimple came under fire after it began interacting with a separate company in China set up by some members of its founding team, even though they never informed TuSimple’s board.

At the same time, commercialization of the company’s technology began to run into technical obstacles that have plagued the autonomous driving sector in general. The combination of setbacks led TuSimple to announce in December that it was withdrawing from the U.S. market to focus on its Chinese operations.

With its change in focus to the China market, TuSimple may be positioning itself to eventually relist in Hong Kong or on China’s domestic A-share market. China has generally been strongly supportive of companies developing autonomous driving technology, providing generous government assistance to them as it tries to build up the sector.

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