Luminar Up 4.4% on Upsized Transaction; Announces Share Buyback

Luminar Technologies, Inc. (NASDAQ: LAZR) disclosed that the purchase deal of LAZR shares was upsized to $625 million in gross proceeds, with support from institutional investors.

Shares of the company gained 4.4% on Thursday and a further 1.4% during the extended trading session to close at $17.69.

Of the total proceeds, Luminar plans to use $300 million to repurchase shares. The remaining amount is expected to be used in bolstering business development, which includes production capacity expansion, new commercial wins, technology roadmap advancement, international expansion, and acceleration of software development.

Chief Financial Officer of Luminar, Tom Fennimore, said, “We have more conviction than ever in our market leadership and business trajectory, and are opportunistically capitalizing on what we believe to be a substantially undervalued and volatile share price. The net proceeds raised from the private convertible bond will be invested to accelerate our growth, and our share buyback is designed to offset future dilution.”

Stock Rating

Cowen & Co. analyst Joshua Buchalter initiated a Buy rating on the stock with a price target of $22 (26.2% upside potential). 

Meanwhile, the Street is optimistic about the stock with a Strong Buy consensus rating based on 5 Buys and 1 Hold. The Luminar stock price prediction of $28.67 implies 64.4% upside potential.

Decreased Hedge Fund Activity

TipRanks’ Hedge Fund Trading Activity tool shows that confidence in Luminar is currently Very Negative, as the cumulative change was a decrease of 1.6 million shares in holdings across all 3 hedge funds that were active in the last quarter.

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