L4 Autonomous Truck Driving will not be so simple for TuSimple Holdings Inc. (NASDAQ: TSP) Why we believe the Company is All Smoke and Mirrors

 

 

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– TSP is the one of the latest hot China based IPO of an ambitious autonomous driving technology company, but we believe the company has systematically lied and misrepresent- ed key information.

– TSP and Nikola have a lot more in common that it may appear; both companies are nanced by the same bad actors – specifically, VectoIQ, aka Stephen Girsky, is an investor here too. These individuals were sued for negligence; when the lawsuit was filed, the BoD at TSP turned a blind eye and allowed them to continue. The existence of this investor was conveniently removed from TSP’s investor presentations.

– TSP’s founders Mo Chen and Xiaodi Hou have a history of failure that is filled with bankruptcies and suspended business licenses. The two teamed up in an Imagine recogni- tion business, which was quickly dissolved. Chen used to run an online advertising. The firm was later sold but has its business license currently removed. Chen tried his hand at an ecommerce used car business that was both suspended by authorities and ended insolvent. The founders’ track record makes them seem remarkably ill-equipped.

– TSP has managed to fool both sell side analysts and inves- tors on pre-order numbers that seem to equate to hundreds and millions of dollar in revenue. The 5,700 pre-orders (Nikola had 7,000) the company touted equate to $420m in potential revenue; however, this “revenue” could be cancelled anytime by the customer and the $500 deposit is completely refundable.

– TSP has managed to fool both sell side analysts and investors on pre-order numbers that seem to equate to hundreds and millions of dollar in revenue. The 5,700 pre-orders (Nikola had 7,000) the company touted equate to $420m in potential revenue; however, this “revenue” could be cancelled anytime by the customer and the $500 deposit is completely refundable.

The SEC sent a letter to TSP to clarify, and they ended up deleting the whole revenue forecast! Other facts investors may or may not have known:

o Out of the 5,700 pre-orders, about 4,000 of these were equity partners with no deposit required! Are those really your true customers?

o It’s not until 2024 where TSP and Navistar are planning to bring the trucks into market!

– TSP presents Navistar as a key “customer.” In reality, TSP has to reimburse Navistar $10m for expenses. TSP is not making any money from this relationship anytime soon – instead, they are paying Navistar for the opportunity to use its name. This relationship is zero risk for Navistar and all the burden lies with TSP. While Navistar helps TSP push KPIs, it made over $200M from its March 2021 pre IPO investments in TSP alone.

 

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Grizzly Research LLC is focused on producing differentiated research insights on publicly traded companies through in-depth due diligence.

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