- Velodyne Lidar jumped as much as 25% Tuesday after issuing a warrant to an Amazon subsidiary to buy nearly 40 million shares.
- The amount represents almost 16% of the auto-sensor maker, which went public in 2020.
- Amazon would get a board observer seat as long as its stake stays above about 12.3 million shares.
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Auto-sensor maker Velodyne Lidar jumped as much as 25% after issuing a warrant to an Amazon subsidiary to buy shares nearly 40 million shares.
California-based Velodyne Lidar issued 39.6 million shares to Amazon.com NV Investment Holdings, according to a Form 8-K filing. This represents almost 16% of the auto-sensor maker.
Amazon for its part would get a board observer seat in a non-voting, observer capacity, given that its stake stays above about 12.3 million shares.
The wholly-owned subsidiary of Amazon can exercise the warrant on or before February 4, 2030, at $4.18 per share. Velodyne shares are trading at $4.54 as of 9:42 a.m. Tuesday.
The vesting of the warrant is based on discretionary payments to Velodyne Lidar by the Seattle-based e-commerce giant of up to $200 million and will vest over time.
The recent move indicates Amazon's desire to invest in smaller businesses that will benefit its sprawling conglomerate. Most recently, the company paid $131 million to take a minority stake in air cargo contractor Air Transport Services Group in 2021. Amazon also acquired self-driving startup Zoox in 2020.
Velodyne Lidar, which made its public debut in 2020 via SPAC merger, provides lidar solutions for autonomous vehicles, driver assistance, delivery solutions, and robotics, among others.
Lidar stands for light detection and ranging and is sometimes called "laser scanning" or "3D scanning." Lidar is widely seen as a crucial component in making fully autonomous cars since it scans the landscape for safe navigation.
Tesla CEO Elon Musk has been a notable critic of lidar tech. He has called lidar a "crutch" and a "fool's errand" and said Tesla wouldn't use it even if it were free. Tesla's approach to autonomous driving relies heavily on cameras.