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Why TuSimple Stock Is Surging Today

By John Rosevear – Aug 19, 2021 at 12:08PM

Key Points

  • A short-seller report that got investors' attention last week turns out to be pretty thin.

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Cathie Wood is buying! But that's not the whole story.

What happened

Shares of driverless-truck start-up TuSimple Holdings (TSP -5.93%) were trading sharply higher on Thursday in a dramatic rebound following a sell-off that may have been triggered by a short-seller's report.

As of 11:45 a.m. EDT, TuSimple's shares were up about 15.6% from Wednesday's closing price. 

So what

TuSimple, founded in 2015, is a San Diego-based developer of autonomous-driving systems for heavy trucks. The company has an impressive list of partners and investors, including big-rig maker Navistar International, United Parcel Service, Nvidia, and the heavy-truck unit of global auto giant Volkswagen. 

TuSimple drew another prominent investor shortly after its initial public offering in April: ARK Invest CEO Cathie Wood, who began adding shares right after the IPO and has added over a million more shares since the beginning of August. One of Wood's big buys (almost 295,000 shares) came on Aug. 12, a day after short-seller Grizzly Research released a report calling TuSimple "all smoke and mirrors."

A technician checks a lidar unit on an International semi truck fitted with TuSimple's driverless system.

Navistar, maker of this International semi, is a key partner of and investor in TuSimple. Image source: TuSimple.

I think Thursday's big gain was simply a rebound in investor interest, perhaps sparked by Wood's buying.

Now what

What about that short-seller's report? To my eyes, Grizzly's report on TuSimple is pretty thin, nothing like the in-depth reports that led to abrupt CEO departures at Nikola and Lordstown Motors. 

Among the "allegations," such as they are: An investor in TuSimple is also a key investor in Nikola, TuSimple's founders had an earlier start-up that didn't succeed, and TuSimple has "China origins" and is therefore (somehow) exposed to the country's recent crackdown on consumer-facing online businesses. 

Long story short: If you liked TuSimple a month ago, I'm not seeing any reason for you to change your mind now. 

John Rosevear has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends Nvidia and Volkswagen AG. The Motley Fool has a disclosure policy.

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Stocks Mentioned

TuSimple Holdings Inc. Stock Quote
TuSimple Holdings Inc.
$2.22 (-5.93%) $0.14
Nvidia Stock Quote
$162.70 (-1.51%) $-2.49
United Parcel Service Stock Quote
United Parcel Service
$182.52 (-0.17%) $0.32
Navistar International Stock Quote
Navistar International
Volkswagen AG (ADR) Stock Quote
Volkswagen AG (ADR)
$18.93 (1.39%) $0.26
Nikola Corporation Stock Quote
Nikola Corporation
$2.39 (0.42%) $0.01
Lordstown Motors Corp. Stock Quote
Lordstown Motors Corp.
$1.33 (-0.75%) $0.01

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

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