Shares of TuSimple Holdings, battered since announcing a sudden change in leadership earlier in March, rebounded on Wednesday after Reuters reported the self-driving truck developer may unload its self-driving trucking business in China.
TuSimple (NASDAQ: TSP), which leads the commercialization of self-driving trucking in the United States, didn’t say much about its China business, which focused on deep-water ports near Shanghai. TuSimple is in talks to sell the unit for up to $1 billion, Reuters saidciting three people who confirmed the talks but were not authorized to speak to the media.
The move follows TuSimple’s February signing of a national security agreement with the Committee on Foreign Investment in the United States (CFIUS) to protect intellectual property developed in the United States from China.
Also as part of the deal, two directors representing Sun Dream Inc., a subsidiary of China-based media conglomerate Sina Corp., said they would step down from TuSimple’s board at the end of their terms. Sina also agreed to a standstill clause preventing further purchases of TuSimple shares, of which it owns about 20%.
TuSimple has further agreed to report periodically to CFIUS through a government security committee to resolve security concerns from US authorities.
Watch now: TuSimple paves the way for autonomous truck inspections
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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 on FreightWaves, saying it was not responding to speculation or rumors.
The report also follows a recent upheaval in senior management. Founder and chief technology officer Xiaodu Hou became chief executive officer on March 3, an unexpected move that sparked a week-long decline in TuSimple’s stock price.
Shares recouped some of the losses on Wednesday, trading up 20% at $11.46 as of 2 p.m. EDT. They had fallen to $8.41 in recent weeks after hitting nearly $80 last year. TuSimple went public in April 2021 via a $40 initial public offering.
The drop in share price may have accelerated talks as TuSimple looks for ways to create shareholder value. The growth of TuSimple’s high-definition map-enabled self-driving cargo network in the United States and pilot trials of driverless trucks in Arizona are impressing Wall Street analysts, most of whom have buy ratings on the stock.
But investors have gone the other way, sending stocks down about 75% since November.
“You could say the stock doesn’t reflect the value of the Chinese market. There may be ways to unlock some of that value,” said a person familiar with the situation who was not authorized to comment. talk to FreightWaves.
TuSimple, founded by Hou and Mo Chen in 2015, operates a fleet of approximately 75 Peterbilt and Navistar International Class 8 trucks equipped with its high-endurance Tier 4 hardware and software. It recorded over $6 million in revenue in 2021 hauling freight for United Parcel Service and other customers in self-equipped trucks with human supervision.
On December 22, TuSimple conducted its first “driver out” pilot, sending a truck 80 miles without a human driver on Interstate 10 from a rail yard in Tucson, Arizona to a depot in Phoenix.
It has repeated this feat many times and recently made driverless pilots a permanent program that will last until a self-driving international LT develops from the ground up with the debut of Navistar in 2024. These trucks will only have no human driver on board.
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