Nasdaq has suspended automonous trucking company TuSimple for failing to file its annual report on time.
Photo from CFP
By WU Yangyu, YANG Shihan, ZHOU Shuqi
Nasdaq suspended trading of autonomous trucking company TuSimple Holdings on Monday. The company received a delisting notice after failing to file its quarterly report on time.
The company warned in March that it would not file its 2022 report until hiring new accountants.
TuSimple has filed an appeal, citing its engagement with an accounting firm and ongoing efforts in preparing the reports. However, the company also acknowledged the possibility of the appeal being unsuccessful, which could potentially result in a delay or uncertainty regarding the timely release of the financial report.
Once a leading company in autonomous trucking, releasing financial reports is the least of the San Diego-headquartered company’s troubles. Revenue in that Q3 last year was only US$2.7 million (19 million yuan), which translates remarkably poorly into a net loss of US$113 million.
On March 9, HOU Xiaodi left the company in what appears to be a fit of pique. The co-founder left behind a note accusing his former colleagues of “vicious retaliation.” Hou was CTO of TuSimple for seven years before taking over as president, CEO and chairman of the board in October last year.
In March last year, co-founder CHEN Mo and former CEO LU Cheng left the company, Chen to found NEV maker Hydron. A few months later Hou was found to have passed confidential information to Chen and was removed by the board. But only a few short months later, Hou has assumed almost complete control of the boardroom.
With Hou firmly in the driving seat, Chen and Lu returned to the company and promptly sacked him as president, CEO, chairman and any other role he had taken upon himself, leaving him nothing but a seat on the board.
Four days after Hou resigned, TuSimple submitted an 8-k filing to the SEC. This is a standard report that companies must file prior to announcing major events that shareholders should know about. In this case, an investigation into Hou for attempting to persuade other employees to quit and join a rival entity.
Hou posted that he knew nothing about the filing, and was concerned about the impartiality of the probe, calling it “retaliation” by Chen and Lu. Hou said he had publicly criticized their decisions on R&D and had refused to offer Lu’s salary demands. Hou claims that Chen and Lu “fired” more than 100 employees who Hou deemed extremely talented.
It is reported Lu would only return to the company under the condition that if he was terminated again, TuSimple would have to pay him a compensation package of up to US$15 million, TuSimple's revenue in 2021 was only US$6.26 million.
Hou said employees came to him “frustrated” by TuSimple’s direction. That direction is away from level 4 autonomous driving technology and back to level 2. Level 4 vehicles drive themselves, and commercialization is a long way off, but level 2 technology, is nothing new.
Last month, TuSimple launched the theTS-Box, a device for cars intended to become a standard, low-cost solution for car makers to develop autonomous driving functions. Lu reckons the box will cut development costs by about a quarter.
The current president of TuSimple Chen told Jiemian News that level 4 requires close collaboration with manufacturers, leading to control disputes. This directly hinders the adoption of TuSimple's products.
