Aurora’s stock gains ground while some self-driving truck competitors stall

While competitors struggle, Aurora Innovation Inc. has seen its stock price increase more than 10 percent during the past month.

Shares of the Pittsburgh self-driving technology company went from $1.28 per share on March 24 to $1.42 at Monday’s close. Year to date, Aurora’s unit price is up 17 percent.

Aurora’s share gains are bit of good fortune in a bleak landscape for the autonomous trucking world. Shares of TuSimple Holdings Inc. have declined 3 percent during the past month and 20 percent year to date. Embark Trucks laid off approximately 70 percent of its staff in March and is mulling a complete shutdown. Its stock, which traded at a high of $117.60 per share last spring, hovered at $2.64 on Monday.

Alphabet Inc. subsidiary Waymo said in January it had “slightly delayed” its internal timeline for commercially deploying self-driving trucks amid layoffs.

This isn’t the first time Aurora’s share price outperformed peers. In September, its stock jumped by as much as 25 percent when a memo, inadvertently sent from CEO Chris Urmson to all Aurora employees ahead of a board meeting, discussed the prospect of Microsoft, Apple or other big companies buying Aurora.

While no sale has yet materialized, it’s possible Aurora could be acquired in the coming months, Tom White, senior equity research analyst at D.A. Davidson Cos., told Automotive News.
“The company’s burning cash, the stock is where it is; they have to raise cash in a palatable way that’s not very dilutive,” said White, who covers the company. “So I could see a large strategic buyer.”

During the past year, Aurora’s market capitalization declined to $1.79 billion from $5.49 billion. The company spent more than $500 million of its cash in that time.

Aurora’s direct competitors in the autonomous vehicle space are not likely suitors, he said. Instead, a large consumer Internet platform such as Amazon, which already owns robotaxi company Zoox, may desire an AV platform that’s more cargo-focused, he said.

Aurora’s share appreciation comes on the heels of two bits of news. In early April, it declared its autonomous driving system “feature complete” and capable of commercial trucking service. Aurora aims to launch that self-driving truck business by the end of 2024.

Three days later, the company said it wanted to raise $350 million in fresh funding via a mixed-shelf offering composed of common stock, preferred stock, warrants, debt securities and purchase contracts.

The company plans to use the funds for working capital and general corporate purposes and may acquire, license or invest in complementary products, technologies or businesses, according to a Securities and Exchange Commission filing. Aurora also noted it may use the money to buy short- and intermediate-term U.S. Treasury-backed securities.

Aurora’s push to raise the money via the public markets is not ideal, though it’s also not very dilutive, White said.

But failure to do so could make Aurora’s investors nervous. If pressed, he said, Aurora could ask a strategic partner such as Volvo, Paccar or Uber, which owns 26 percent of Aurora, to fund the company through its expected launch of the self-driving truck business.
“They’ve already sunk a ton of money into Aurora,” White said. “It’s a little nerve-wracking, but the company’s been delivering on technology and on its timetables.”

Aurora has a first-quarter business review call scheduled for May 3.