Luminar, a lidar startup backed by Ford Motor Co. and Volkswagen AG, announced on Tuesday that Austin Russell, its billionaire founder and CEO, has been removed from his position by the company’s board of directors.
New Leadership
- Replacement: Paul Ricci, former chairman and CEO of Nuance Communications Inc., will take over immediately as CEO. Ricci is a seasoned tech executive known for scaling companies and driving innovation.
Reasons for Departure
- The board stated that Russell resigned due to an ongoing investigation related to a code of business conduct and ethics inquiry by Luminar’s audit committee.
- The company emphasized that there was no impact on Luminar’s financial results or operations during this period.
- It remains unclear whether Russell was forced out or if he chose to resign voluntarily.
Company Background
- Luminar went public through a merger with Gores Metropoulos Inc. last year, achieving a valuation of $13 billion. Shares were listed publicly at $40 each earlier this year, more than double their initial trading price in December 2020.
- The company raised an additional $1 billion from investors, including Fidelity International Ltd., T Rowe Price Group Inc., BlackRock Inc.’s iShares unit, and Vanguard Group Inc.
Market Reaction
- Following the news of Russell’s departure, Luminar’s stock closed down 4% on Tuesday afternoon but rose slightly later in trading after the announcement of Ricci’s appointment.
Partnerships and Investments
- Ford Motor Co.’s CEO Jim Farley expressed satisfaction with the collaboration between Ford’s autonomous vehicle unit, Argo AI LLC, which invested nearly $3 billion into Luminar last year for access to its lidar technology used in self-driving cars.
- Volkswagen AG holds approximately a 9% stake in Luminar, valued at over $1 billion according to FactSet data.
Lidar Technology
- Lidar technology utilizes laser light pulses emitted from sensors mounted on vehicles (cars, trucks, buses, etc.) to detect surrounding objects. This information is relayed back via radio signals, allowing onboard computers to determine distances, speeds, directions, and relative positions.
Agreement with Argo AI
- Argo AI has agreed not to purchase additional shares until March next year, as per an agreement signed between the two companies. However, Argo AI can acquire more shares if certain conditions are met, including a change control event involving a majority shareholder group.
- Both parties have also established terms under which either may terminate the agreement with prior written consent, provided certain conditions are met.
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