Velodyne Lidar’s Stock Is Having a Bumpy Ride
Lidar, a technology combining laser rangefinding and laser scanning in three dimensions, is one of the front-running choices for autonomous vehicle navigation systems as robots and robotic vehicles move closer to widespread availability.
Velodyne Lidar (NASDAQ: VLDR), a lidar tech company, started out nearly 40 years ago as a subwoofer manufacturer, but entered the lidar field in the 21st century.
Now, with self-driving vehicles and other robotics going mainstream, Velodyne went public and saw its stock value surge—but now has hit a bumpy stretch and is trading much lower than in mid-February. Could a rebound be in the cards?
The Recent Story of Velodyne Lidar Stock
Velodyne went public at the start of July last year, through a merger with blank-check SPAC (special purpose acquisition company) Graf Industrial Corp. Its share prices spiked to $28.90 immediately after its public debut on the NASDAQ exchange in September, as frequently happens after high-profile IPOs, then plunged to $12.23 within a month.
It climbed back to the $23 to $25 range in December and remained at this high plateau until early to mid-February, when it began falling again, soon reaching its current approximate $14 to $15 level.
Some factors contributing to Velodyne’s slump over time include:
- Weak Q4 and full-year performance for 2020, reported on February 25. Q4 revenue fell roughly 6.3% year over year from 2019’s $19.0 million to 2020’s $17.8 million. Velodyne generated a net loss, which improved only marginally to $20.1 million and $0.12 net loss per share compared to Q4 2019’s $26.2 million overall and $0.19 per share net losses.
- Full-year 2020 revenue down 5.9% year over year, while adjusted net loss of $65.1 million increased somewhat from 2019’s $64.5 million.
- Velodyne removed its founder David Hall from his chairmanship of the Board of Directors in late February, and fired his wife Marta Hall from her Chief Marketing Officer position, claiming the Halls “failed to operate with respect, honesty, integrity, and candor.” David Hall fired back a public statement, saying the censure is “based on unfounded claims which we strongly refute.”
- Hall also alleged the Board “fostered an anti-stockholder culture and that Velodyne Lidar’s corporate governance is broken,” before going on to blast the Board’s “decision to rubberstamp” boosted pay for CEO Anand Gopalan even though Gopalan’s leadership allegedly resulted in “releasing weak Q4 2020 earnings and missing year end forecasts.” Hall alleges the board of directors, now including several SPAC personnel whose experience he calls into question, has decided “to prioritize its own self-interests over stockholders and has overseen the destruction of significant stockholder value.”
- The drama and mutual accusations of malfeasance, many of which refer to matters invisible to the public, appear to have frightened off many investors.
- The company’s stock value also fell in mid-April after its competitor Livox was selected to provide double prism sensors for a “smart EV” soon to roll off the production lines of XPeng Motors.
- Bank of America gave Velodyne an “Underperform” rating last week, citing the fact many of its contracts are outside the auto industry, strong competition, and high costs.
Velodyne Stock Forecast: Where It Could Go From Here
Right now, while Velodyne share value is still much lower than a few months ago, it is still very volatile. Single-day gains of up to 20% are offset by abrupt drops. Just on Monday, Velodyne’s stock, and the shares of several other companies in the electric vehicle (EV) sector, soared after the government announced a plan to spend $15 billion to “enable a clean transportation future.”
Those gains, however, soon shriveled after a lawsuit alleging the company “made materially false and/or misleading statements” to investors moved forward in court. While class action lawsuits seldom have much impact on businesses’ operations, the strong stock market reaction shows how unstable Velodyne’s valuation currently is and how the executive drama of the Halls versus the Gopalan faction continues to overshadow its fortunes.
The news isn’t all doom and gloom for Velodyne, however. The company has a large and growing number of contracts, with its number of projects increasing from 131 at 2020’s start to 194 in early 2021, a 48% surge. The company also notes:
- It has $1 billion worth of signed and fully agreed upon contracts for the 2021 through 2025 period.
- For the same five-year period, it is currently negotiating $4.4 billion more in various projects that have not yet resulted in signed contracts.
With lidar just taking hold as robotic and autonomous vehicles, along with other sophisticated robotic applications, are just starting to see serious use, the long-term value of future contracts may indeed be more important to Velodyne’s trajectory than the short-term results of a few weak quarters during the COVID-19 panic.
The melodrama of executive infighting is perhaps more worrisome, with many of its details invisible to investors, but if Velodyne can move past this brouhaha, it appears to have products and market positioning potentially capable of robust growth over the next few years.
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