Luminar Technologies, a leader in automotive lidar technology, is set to issue $35 million in convertible preferred stock to investors. This decision follows an extensive reorganization at the company. Just earlier this month, founder Austin Russell had to resign as CEO and board chair. The financial ploy netted Luminar $200 million in cash, giving the company’s balance sheet a much-needed splash of green amid an otherwise chaotic spate of layoffs and leaders.
On May 15, the company announced yet another wave of layoffs. Experts estimate these layoffs will result in cash charges of $4 million to $5 million. All told, Luminar has cut 212 workers since January. These cuts affect about 30% of the agency’s workers. The latter are scheduled to continue at least through the first quarter of 2025. These layoffs come after years of organizational restructure that paid lip service to increased efficiency but have failed to simplify the new culture of the agency.
Luminar’s board played a savvy hand by placing an industry dog and pony show into the trump card position. This decision indicates a new direction in their leadership development. The recent agreement with investors, where Luminar plans to sell convertible preferred stock, could provide Luminar with an additional $200 million over the next year and a half. Moreover, they can be awarded additional tranches of as much as $35 million every 60 days.
Luminar’s current market capitalization is about $179 million. The company has experienced both successes and challenges since its inception in 2012 by Russell, who was just a teenager at the time. In late 2021, Luminar went public in a deal with special purpose acquisition company Gores Metropoolus Inc. At $1.0 billion, this deal pushed Luminar’s market valuation to $3.4 billion.
This call to attention highlights the difficulty of Luminar’s financial moves as it continues to make its way through the ongoing struggles of their business model.
“Today’s transaction provides us with additional financial flexibility and further strengthens our balance sheet.”
This statement underscores the importance of the recent financial arrangements as Luminar navigates its operational challenges.