Shares of lidar maker Luminar Technologies (LAZR -16.07%) were trading sharply lower on Thursday morning, after the company announced that its founder would depart following an internal investigation.
As of 10:30 a.m. ET, Luminar's shares were down about 17.6% from Wednesday's closing price.
Luminar's visionary founder left abruptly after a board investigation
Luminar said late on Wednesday that its founder, chairman, and CEO, Austin Russell, had resigned effective immediately "following a code of business conduct and ethics inquiry" by the board of directors' audit committee.
Austin Russell was Luminar's founder and CEO -- and the face of the company -- until Wednesday night. Image source: Luminar Technologies.
Russell will remain on Luminar's board. The company said the matter does not impact any of its financial results.
Russell will be succeeded on May 21 by Paul Ricci, the longtime CEO of artificial intelligence (AI) speech company Nuance Communications. (Nuance was acquired by Microsoft in 2022.) Thomas Fennimore, Luminar's CFO, will serve as interim chief until Ricci's start date, the company said.
This isn't good news for Luminar stock
This is very big news for Luminar and it raises some hard questions about the case for the stock.
Russell was the visionary behind the company's products and strategy, and his connections and industry reputation were a big part of the investment case for Luminar. While Ricci is no slouch, it'll take time for him to get up to speed on Luminar and its specialized corner of the industry -- and the company's business could well suffer in the meanwhile.
It won't help that the auto industry -- Luminar's market -- is being cautious about spending amid uncertainty about the Trump administration's tariff plans.
I wouldn't dump the stock just yet. But if you've been thinking about buying, or buying more, I'd wait a bit to see how this plays out.
