OUST - Luminar CFO addresses chip image issue calls out Goldman analyst

2023-03-24 12:39:16 ET

Luminar Technologies CFO Tom Fennimore penned a strongly worded open letter on Friday, arguing the stock’s recent slide is unjustified.

Shares of the Florida-based automotive technology company have fallen sharply in March, sliding over 35% since March 3. The stock added to that decline on Friday, slipping 5.81%.

A key catalyst for that slide was the revelation that the company used an image of a chip belonging to a competitor in promotional material. Adding to downside pressure, Goldman Sachs moved to a Sell rating in mid-March as its analysts argued there is downside to margin projections from the company.

Fennimore dismissed these issues as “other lidar companies stepping up their public attacks”, “FUD”, and “misinformation.” He accused the broader industry of adopting a “crab mentality” amid a struggle to compete.

On the issue of the competitor’s chip being used in a Youtube video, Fennimore attributed this to simple human error. He explained that a team member utilized a generic photo that was not meant to be representative of Luminar’s technology, but of a photonic integrated circuit generally.

“A startup company that Luminar has never heard of contacted the media claiming that we were improperly passing off their tech as ours. This is clearly not the case,” he declared. “For the avoidance of doubt, we replaced the thumbnail with an actual microscopic photo of one of our integrated circuits. Let me be clear — all of our key semiconductor intellectual property at Luminar is home grown and owned by us.”

Fennimore also took Goldman Sachs analyst Mark Delaney to task for moving his rating from Neutral to Sell earlier in the week .

“This downgrade took us by surprise as the same analyst had published a note a couple weeks prior reiterating both his Neutral rating and price target,” he wrote. “Every analyst is entitled to his or her views, but there did not appear to be a credible Luminar-specific catalyst for the downgrade.”

He dove into Delaney’s commentary on ASP/margin pressure and argued that a premium valuation for Luminar as compared to peers is warranted. His letter concluded with a reiteration of a commitment to 2023 targets set forth in the company’s early March earnings result .

Shares of Luminar ( NASDAQ: LAZR ) declined sharply on Friday despite the vigorous defense. Shares of Innoviz ( INVZ ) -5.49% , AEye ( LIDR ) -11.49% , Mobileye ( MBLY ) -5.09% and Cepton ( CPTN ) -6.02% all fell as the LiDAR industry broadly dipped after Ouster’s ( OUST ) -12.91% earnings disappointment on Thursday evening .

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