![]() ![]() Besides, the stock has a market cap of nearly $6 billion, which isn't exactly a bargain basement price. As mentioned above, Luminar was already watching the cash balance drip lower, but investors probably didn't want to see a debt offering hanging over the business in order to repurchase shares. The company raised cash far beyond the amount needed to fund a $250 million share buyback. The overallotment amount will likely push the convertible debt offering to $625 million. While the CFO bought 16K shares, Luminar announced the pricing of an upsized $550 million 1.25% convertible senior notes offering. ![]() The company stated the buyback plans were reliant on a proposed private financing transaction. The move came with a massive catch considering Luminar is burning cash to build the business for the launch of autonomous vehicles in the 2024/25 timeframe. Today, we’re putting our money where our mouth is by executing this significant purchase of shares as we accelerate our industry leadership. Given our current position and our trajectory, we think our stock price has not reflected the wins and successes we’ve had over the past year since our public debut, with substantial inefficiency in the market. Luminar Founder and CEO Austin Russell made the following statement about the share buybacks in the announcement: The company along with several executives and board members were set to buy cheap shares of the stock. Sometimes the executives are exactly correct, but a lot of times executives using debt are taught a tough lesson by the market.īack on December 14, Luminar announced a plan for an authorization to repurchase $250 million worth of stock. Insiders always think they know more about how the market should value a stock than the market itself. ![]() ![]() An investor has the option to value the stock based on the current revenue base, projected revenue base or the backlog. The ultimate goal was for the forward-looking order book to reach ~$10 billion in 2025. Luminar ended 2020 with a $1 billion order book and now forecasts the amount reaching $1.6 billion in 2021. The market will stop questioning the validity of these numbers as projects are awarded and start moving forward with production plans. The stock valuation should start being based more on the order book. The analysts are probably conservative with the 2024 revenue targets below $400 million here. The company isn't expecting to see much growth next year (appears conservative) with the eventual revenue ramp in 2023 leading to over $400 million in 2024 sales. The revenue picture actually remains above the original forecast of Luminar. The cash balance is starting to burn fast after the initial fund raising with the SPAC deal. The Lidar sensor company had forecast ending 2021 with a cash balance of ~$486 million. The company spent $38 million during Q3'21 with a forecast to burn another $42 million in Q4'21. On the flip side, Luminar will burn ~$140 million of cash this year. The company has announced 6 major commercial wins so far this year. Luminar has announced several new major deals with NVIDIA ( NVDA) and Polestar ( GGPI) in the automotive space along with commercial wins in AV trucking with Embark ( EMBK) and Kodiak Robotics. As these companies gain commercial momentum, the market will return to investing based on more comfort around these large backlogs. The Lidar sensor company is predicting revenues to top $30.0 million while the backlog hits the 60% growth target for 2021 to reach $1.8 billion. For Q3'21, revenues grew 89% to $8.0 million and the company forecast Q4'21 revenues to reach at least $10.4 million and up to $13.4 million. Luminar became a public story back in 2020 when the company was hardly producing sales. My investment thesis remains Neutral on the stock despite the sector tipping towards material sales as the stock remains richly valued. The sector is far more appealing now after a year of several companies being public with the market making progress towards production goals. Over the last few weeks, a few Lidar sensor companies have made moves to raise funds including valuation leader Luminar Technologies ( NASDAQ: LAZR). JHVEPhoto/iStock Editorial via Getty Images ![]()
0 Comments
Leave a Reply. |
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |