A set of investment offerings are positioned to fill up the tanks of autonomous vehicle developer Aurora Innovation Inc. with enough cash to sustain operations until the deployment of its self-driving trucking product, which is expected to start shipping by the end of 2024.
In a series of press releases and documents filed with the U.S. Securities and Exchange Commission, Strip District-based Aurora (NASDAQ: AUR) announced that it issued an underwritten public offering of more than 73 million shares of its outstanding Class A common stock with a price of $3 per share, which if sold, is a deal valued at about $220 million. Aurora said the deal's underwriters have 30 days to purchase an additional 10.9 million shares at the public offering price "less the underwriting discounts and commissions."
Additionally, Aurora said it initiated a concurrent private placement purchase agreement with "certain existing institutional and strategic investors, entities affiliated with two of Aurora’s directors, and new institutional investors" to sell 222,222,216 shares of its Class A common stock at $2.70 per share, which would bring in $600 million upon the close of the deal. Aurora said it expects that to happen on July 21.
An Aurora spokesperson cited the two press releases the company put out relating to the deals when reached for comment and said further details would likely be unsharable at this time "due to SEC and legal restrictions."
In a Form 8-K with the SEC, Aurora disclosed it told buyers and investors in connection with the private placement that the company had $785 million in cash, cash equivalents and short-term investments as of June 30, 2023. It said the company estimates an average quarterly burn rate of $175 million to $185 million from Q3 2023 through "its planned commercial launch" of its autonomous trucking product, which is set to occur by Q4 2024, though that's a date that's already later than the timeline the company previously had for the product.
Aurora posted a $196 million net loss for Q1 2023 and it posted a $293 million net loss in Q4 2022, the latter of which saw the company announce that it had slowed hiring but that it wasn't expecting to issue layoffs in the near future. The company ended 2022 with a net loss of $1.7 billion.
Furthermore, Aurora said it estimated needing between $1.6 billion to $1.7 billion in incremental capital beyond the cash, cash equivalents and short-term investments it had as of this past June to become free cash flow positive by the end of 2027.
The company's stock ended trading on Wednesday at $2.88 per share, down over 10% from the prior day's close of $3.22 per share. Its 52-week range has seen the stock price span from $1.10 per share to $3.54 per share.
But despite the stock's intraday decline, the expected closing of a deal made from its private placement alone is likely a positive sign that investors are still backing the company's ambitious vision of someday equipping large swathes of the shipping industry with trucks that can drive themselves. Aurora also plans to provide self-driving tech for passenger vehicles at a later date using much of the same hardware and software found on its trucks.
"This is sort of an old fashioned— like 1999—reason to sell stock, but many companies with underdeveloped products do this," Kim Caughey Forrest, founder and chief investment officer at Strip District-based Bokeh Capital Partners LLC, said in an email statement. "Tech and biotech are big sellers of additional shares to fund operations. From the results of the offering—that it sold 15% more than originally estimated—it was a hit with some investors."
Aurora went public on Nov. 4, 2021, and raised an estimated $2 billion from the process. It employs about 2,000 people across the U.S., about half of whom report to its headquarters on Smallman Street in the Strip District.
