Luminar Strikes a Major Deal with Intel Subsidiary Mobileye

Summary:

• Luminar said on Friday that it scored a deal to merge with and develop self driving vehicles with Intel Corp's Mobileye.
• Luminar will provide automotive lidar hardware to Mobileye as it continues to develop self driving technology. Mobileye has historically abstained from laser-based lidar in favor of relying primarily on cameras and computer vision, so the adoption of lidar marks a significant strategic shift for the company, which was acquired by Intel in 2017.
• In Friday's deal, Israel-based Mobileye said it will use Luminar's lidar for the first generation of its Level 4 Mobility-as-a-Service pilot and driverless fleet in key markets around the world.

For starters, LIDAR, which stands for Light Detection and Ranging, is a remote sensing method that uses light in the form of a pulsed laser to measure ranges (variable distances) to the Earth.

Lidar can basically create a 3-D, point-cloud map of a vehicle's surroundings in daylight or darkness, and has made it an essential technology for companies working to perfect self driving cars. Except for Tesla. I'm not surprised Elon called it a "fool's errand" and kept it out of his electric vehicles, the guy has his own line to run. Anyway, Luminar, Velodyne, Waymo (who make their own lidar sensor) and newer companies like Aeva, argue that lidar's ability to measure depth is vital and that combining it with cameras and radars ensure autonomous systems are safe.

“The camera gets you the first 99%” of visual data for self-driving vehicles, says CEO Austin Russell (a Forbes 30 Under 30 alum). “Lidar gets you that last 1%.”

Luminar has 50 commercial partnerships across passenger vehicles, trucking and robo-taxi vehicles, representing approximately 75% of the major players in its targeted customer ecosystem. They have recently announced supply deals with Volvo Cars and Daimler, two big deals to take Luminar to the next level it needs for production. The company announced plans in August to list shares on Nasdaq through a SPAC merger with Gores Metropoulos. It will trade under the ticker “LAZR” once the merger completes in December. We're not early on the news, but it's good to have some liquidity enter the stock. AKA pump. That's fine by me, I ride pumps. The move to go public boosts Luminar’s market capitalization to more than $3 billion and will likely turn Russell into the youngest billionaire in the U.S.

The charts

• Strong buying volume the past few days, obviously on the news.
• Broke past the 200 MA and the 50 MA, needs to hold past it and consolidate around the 12 area. I like this spot as a loading zone, under 11 would be nice.
• I think the drop in price from 14 was the post pump exhaustion. Positions were taken and news had run dry, but with the merger so close we saw more buying.
• Based off of the electric vehicle hype, the news, deal valuation and past performance of SPAC's as of late, I personally think this can see 20.

• Has been accumulating since around the 22nd of October, forming a strong base.
• Broke out of the descending channel, needs to consolidate outside of the channel at 12.40 on the downside. A break of resistance at 14 will send it higher.

I don't know about you, but even if I'm not the biggest fan of riding in a self driving car, I'm not going against the grain of evolution. If all goes as expected, its first day as a public company will come on December 3rd. It's slated to get $400 million in cash from Gores Metropoulos and another $170 million from existing big name investors, who include venture capitalist Peter Thiel, Volvo and GoPro Inc. founder Nick Woodman.  It's expected to be valued at $3.4 billion after the merger.

Luminar projects it won't be profitable on an earnings before interest, taxes, depreciation and amortization basis — until 2024. It will trade on Nasdaq with the ticker symbol of “LAZR.”

**Not a financial advisor. Articles are opinion only.