Chinese autonomous trucking startup TuSimple has announced its decision to delist itself from the Nasdaq stock exchange as it proceeds with its plan to fully exit the U.S. market. The company revealed that it will file a Form 25 on or around January 29 to deregister its stock, with the expectation that the shares will trade until about February 7.
Key Takeaway
TuSimple, a Chinese autonomous trucking startup, is set to delist itself from the Nasdaq stock exchange as it prepares to exit the U.S. market entirely. The company’s decision to deregister its stock is attributed to factors including a decline in valuation and liquidity, increased stock price volatility, and changing investor sentiment in the capital markets. TuSimple’s move follows a series of challenges, including regulatory scrutiny, internal leadership changes, and strategic setbacks, ultimately leading to its strategic shift away from the U.S. and towards China.
Reasons for Delisting
TuSimple cited several reasons for its delisting from the stock exchange. The company’s special committee, composed of independent directors, highlighted the decline in its valuation and liquidity, as well as the significant increase in the volatility of its stock price. Additionally, the committee stated that the benefits of remaining a publicly traded company no longer justify the associated costs. TuSimple, which went public in 2021 with a valuation of over $8 billion, is currently valued at approximately $70 million, with its shares trading at around 30 cents, down from a high of $62.58.
The committee also pointed out the significant shift in capital markets since TuSimple’s initial public offering in 2021, attributing it in part to rising interest rates and quantitative tightening, which has altered investor sentiment for pre-commercialization technology growth companies.
Background and Recent Challenges
Prior to its public offering in 2021, TuSimple underwent scrutiny from the Committee on Foreign Investment in the United States due to its Chinese shareholders. This led to investigations by the FBI and the Securities and Exchange Commission, partly related to co-founder Mo Chen’s association with another Chinese trucking startup, Hydron. Subsequently, Chen was involved in the ousting of fellow TuSimple co-founder Xiaodi Hou in late 2022 during the startup’s investigation.
Following these events, the company faced ongoing challenges, including workforce reductions and strategic indecision, narrowly avoiding a forced delisting in May of last year. Ultimately, TuSimple made the decision late last year to fully withdraw from the U.S. market and refocus its efforts on China. As part of this shift, some of its trucks in the U.S. are set to be auctioned, along with various other equipment such as the lidar sensors acquired from Hesai and Aeva.
