It wasn’t that long ago that self-driving trucks company TuSimple was on a tear — raising funds, locking in partnerships and hitting some development milestones that seemed to push it to the front of the AV pack.
A string of internal scandals and executive upheaval that resulted in the ousting of co-founder Xiaodi Huo, an SEC investigation and a restructuring in December has left the former darling of the nascent self-driving trucks sector in shambles. And now its on the cusp of being delisted from the Nasdaq exchange.
The company reported Thursday that it received a delisting notice from the Nasdaq for failing to file its quarterly report on time. TuSimple hasn’t filed a quarterly report for the fourth quarter or full-year results. It last reported earnings for the quarter ended September 30.
Shares fell nearly 30% in trading Thursday to $0.80.
Nasdaq will suspend trading of TuSimple shares on May 15 unless it files an appeal. TuSimple said it intends to appeal and will ask for an extended stay of the suspension of trading until its hearing with Nasdaq.
The company also said its board has approved appointment of UHY LLP at its new independent registered public accounting firm for the fiscal year ended December 31, 2022.
When TuSimple launched in 2015 it was one of the first autonomous trucking startups to emerge in what has become a small, yet bustling industry that now includes Aurora, Kodiak and Waymo. TuSimple’s founding team and its earliest backers Sina and Composite Capital are from China, but the company positioned itself as a U.S. company with its global headquarters in San Diego and later an engineering center and truck depot in Tucson and a facility in Texas to support its autonomous trips
The company scooped up capital from a diverse consortium of strategic investors, including Volkswagen AG’s heavy-truck business The Traton Group, Navistar, Goodyear and freight company U.S. Xpress. And in March 2021 it filed for an IPO, eschewing the financial SPAC trend.
Despite its upward trajectory there were problems lingering in the background. Its S-1 flagged a regulatory risk due to its Chinese funding source. The Committee on Foreign Investment in the United States would eventually conclude its review and TuSimple would work to offload the Chinese piece of its business.
TuSimple shares would reach its peak in July 2021 when the price hit $62.58. Over the next six months, its share price dropped by half. But the real fall would begin in late December 2021. Shares have fallen 97% since then.
In 2022, internal drama would lead to the ousting and rehiring of CEO Cheng Lu, who returned after Hou, who had held CEO, president and CTO posts, was fired by the board. Hou, who co-founded TuSimple in 2015 with Mo Chen, was also removed from his position as chairman of the board and member of the board’s government security committee.
Hou’s firing came a day after The Wall Street Journal published a report citing unnamed sources that TuSimple was facing concurrent probes by the Federal Bureau of Investigation, Securities and Exchange Commission and Committee on Foreign Investment in the U.S. (CFIUS). The investigation was focused on TuSimple’s relationship with Hydron, a hydrogen-powered trucking company led by TuSimple co-founder Chen and backed by Chinese investors.
Hou has disputed the reason for the firing, posting on his LinkedIn account that he resigned from TuSimple’s board due to disagreements over Lu’s compensation package, as well as the company’s shift in focus from Level 4 autonomy to Level 2 autonomy.
TuSimple also lost Navistar as a partner in late December when the two companies ended a plan to co-develop self-driving trucks. A few weeks after the deal fell apart, TuSimple announced plans to lay off 25% of its total workforce, or about 350 workers, as part of a broader restructuring plan designed to keep the company running.