What happened
Shares of TuSimple Holdings (TSP) shot through the roof Wednesday, surging by as much as 58.8% as of 1:07 p.m. ET. Until last week, it appeared the company was on the verge of getting delisted from the Nasdaq stock exchange, and its share price dropped precipitously as investors ran for cover. However, TuSimple has managed to avert a delisting for now, and that has triggered a buying frenzy in the stock.
So what
Last week, TuSimple received a delisting notice from Nasdaq due to its failure to file quarterly and annual earnings reports. It would be suspended from trading on May 15, said the exchange, unless the company appealed the notice. In the wake of that news, the stock plunged below the $1 mark.
So has TuSimple filed any reports or provided any updates about its potential delisting? The answer is no.
In fact, even on May 11, the company said that it "is unable, without unreasonable effort or expense," to file with the Securities and Exchange Commission either its Form 10-Q report for the quarter that ended Sept. 30, 2022, or its Form 10-K report for the year that ended Dec. 31, 2022, by the prescribed date. TuSimple, however, said it intends to file the reports "as soon as practicable," and it will not report its results for the first quarter of 2023 until its 2022 reports are filed. That same day, however, TuSimple also said it had appointed a new auditor to start work on its financial reports.
There's been no update from TuSimple since, but the fact that the stock has continued to trade past May 15 proves that something's going on behind the scenes -- perhaps that TuSimple has appealed Nasdaq's notice and managed to dodge a delisting.
Now what
When TuSimple went public in 2021, it wasn't a run-of-the-mill company that was hyped. TuSimple's autonomous driving technology targeted at long-haul trucks looked hugely promising given the massive opportunities for self-driving in a niche market like freight trucking. TuSimple also partnered with big names like Nvidia and UPS, which further piqued investor interest in the stock.
However, late last year, questionable dealings by then-CEO Xiaodi Hou in China caught the regulators' attention, and things haven't been easy for the company since. Hou was fired in October. If TuSimple can get its act together and file its reports, the stock could heat up a lot more.
