Luminar Technologies, Inc. (NASDAQ:LAZR) shares are under heavy pressure Monday after the company announced that it initiated voluntary Chapter 11 proceedings to pursue court-supervised sale processes for its core businesses.
- Luminar Technologies shares are approaching critical lows. What’s pressuring LAZR?
What To Know: Luminar announced that it has initiated voluntary chapter 11 cases in the U.S. Bankruptcy Court for the Southern District of Texas. The company entered Chapter 11 with the support of approximately 91.3% of first-lien noteholders and 85.9% of second-lien noteholders.
Prior to the bankruptcy, the company said it sold its Luminar Semiconductors Inc (LSI) subsidiary to photonics and quantum optics technology company Quantum Computing Inc for $110 million in cash. Luminar emphasized that LSI is not a debtor in the Chapter 11 cases and its operations are expected to remain unaffected during the process.
Luminar appointed a new CFO in November and disclosed that it was exploring a number of potential strategic alternatives, including the sale of all or part of its business or assets, raising additional capital or restructuring its existing capital structure.
“Over the past six months, we have taken meaningful steps to drive operational discipline, streamline our cost structure, and sharpen our strategic direction, but our legacy debt obligations and the pace of industry adoption have challenged our ability to operate the business in a sustainable way,” said Paul Ricci, CEO of Luminar.
“After a comprehensive review of our alternatives, the board determined that a court-supervised sale process is the best path forward.”
During the Chapter 11 period, Luminar expects to continue operating, maintain delivery of its LiDAR hardware and software and work closely with suppliers to minimize disruptions.
The company’s performance has been mixed in recent quarters. Luminar missed expectations for revenue in two of the past five quarters. In reaction to the bankruptcy news, the company’s stock reached an all-time low of 33 cents. Analyst consensus has the stock at a sell rating.
LAZR Price Action: Luminar shares were down 61.13%, trading at 35 cents at the time of publication, according to Benzinga Pro.
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