The boardroom drama continues at TuSimple (NASDAQ:TSP), an autonomous driving company. The company announced that its co-founder and major shareholder (who controls 59% voting power), Mo Chen, has been named the Board’s Executive Chairman. Chen held this position at TSP until he launched Hydron, a hydrogen-powered truck manufacturing company, earlier this year.
It’s worth highlighting that TSP’s stock price has been affected by the executive-level shake-up and investigations into the company by the SEC (Securities and Exchange Commission), FBI (Federal Bureau of Investigation), and CFIUS (Committee on Foreign Investment in the U.S.) over its relationship with Hydron.
Investigators are investigating whether TSP defrauded investors by sharing valuable technology with Hydron, which has most of its operations in China and is backed by Chinese funding. Shares of TuSimple are down about 93% year-to-date. Meanwhile, the stock closed at $2.59 on November 16, much below its IPO price of $40.
Earlier, On October 31, TuSimple’s board terminated CEO Xiaodi Hou (the other co-founder) after it concluded in an investigation that Hou shared confidential data with Hydron.
Chen’s return is followed by the exit of Ersin Yumer, the interim CEO of TSP. Cheng Lu has been appointed as the new CEO. On his reappointment as the CEO, Lu said he would focus on stabilizing operations.
TSP stock was up about 1.5% in the pre-market session on November 17.
Is TSP Stock a Buy?
Given the investigations and uncertainty, TSP stock could be a risky bet. It has a Moderate Sell consensus rating on TipRanks based on six Buy and three Hold recommendations. Due to the decline in TSP’s price, its average price target of $5.27 implies 103.4% upside potential.
Despite the fact that hedge funds purchased 2.5 million shares of TSP stock last quarter, retail investors are bearish on the stock. Overall, it has an Underperform Smart Score of three on 10 on TipRanks.
