Velodyne Lidar stock jumps on news of..

Velodyne Lidar Stock Jumps on News of Investment by Amazon

Shares of Velodyne Lidar Inc. jumped by more than 7% on Tuesday, a day after the autonomous driving sensor company reported an investment by Amazon.com Inc.

The San Jose company said in a regulatory filing that it plans to issue a warrant for Amazon.com NV Investment Holdings LLC, a subsidiary of the online retail giant (Nasdaq:AMZN), to buy about 39.6 million of its shares (Nasdaq:VLDR).

Amazon will get to put an observer on Velodyne’s board as long as its stake stays above about 12.3 million shares.

Amazon can exercise the warrants any time before Feb. 4, 2030, at a price of $4.18 a share. The warrants are set to vest over time based on discretionary payments by Amazon of up to $200 million.

Velodyne’s shares have lost more than 80% of their value since it merged with special purpose acquisition company Graf Industrial Corp. They closed at $4.04 on Tuesday.

The company has been involved in a dispute with its founder David Hall after it ousted him from his job as chairman and his wife as chief marketing officer last February. The Halls sued the company last month. They claim some directors and Velodyne’s counsel misrepresented key facts about the business leading up to its merger with a blank check company in September 2020.

The company is scheduled to report fourth-quarter and full-year results on Feb. 28. In its last report, Velodyne said that its revenue dropped 43% in the first nine months of the year. Its net loss in the period more than quadrupled to $174.8 million.

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