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Highlights
- Amazon’s Velodyne investments could help reduce its expenses on transporting.
- Amazon can appoint an observer to Velodyne's board as part of the warrant deal once its holdings exceed 12.3 million shares.
- The agreement comes after Amazon purchased the autonomous vehicle startup Zoox in 2020 for US$1.3 billion.
Shares of Velodyne Lidar (NASDAQ:VLDR) skyrocketed over 135% on Tuesday after a regulatory filing showed a wholly-owned subsidiary of Amazon.com Inc (AMZN) received a warrant to purchase nearly 40 million VLDR stocks. The stock was up 135.71% to US$1.65 after the close of the regular session.
The San Jose, California-based Velodyne makes light detection and ranging (lidar) systems. The warrant shares, which will increase over time, could lead to Amazon’s significant stake in the company.
Velodyne’s lidar sensors enable autonomous cars to scan the traffic around them.
As part of the warrant deal, worth nearly US$200 million, between the two companies, Amazon can appoint an observer to Velodyne’s board once its holdings exceed 12.3 million shares.
The e-commerce giant could own up to 39,594,032 Velodyne shares. The agreement comes after Amazon purchased the autonomous vehicle startup Zoox in 2020 for US$1.3 billion.
The Velodyne stock jumped more than 90% on Monday after the warrants purchase news, while the Amazon stock closed at 2.2% on Tuesday. Amazon’s Velodyne investments could lower its expenses on transporting goods and people.
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Source: Pixabay
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Warrant Agreement
In a regulatory filing on Monday, the lidar-maker revealed that it had entered into a warrant sale agreement with the e-commerce giant. Velodyne’s warrant would allow Amazon to buy nearly 40 million Velodyne shares, or 16% of the company, for US$4.18 per share.
The Velodyne stock fell about 80% last amid internal dispute and the resignation of its former CEO Anand Gopalan in July.
According to the deal, the e-commerce giant’s wholly-owned subsidiary Amazon.com NV Investment Holdings can exercise the warrant by February 4, 2030, at US$4.18 per share. The warrant shares will vest over time based on its compensation of about US$200 million to Velodyne, Reuters reported.
