TuSimple (NASDAQ:TSP) stock is in the spotlight following Cathie Wood’s persistent purchases of the autonomous truck technology company. Between Sept. 13 and Sept. 20, the Ark Invest CEO purchased 690,607 shares through her ARK Innovation (NYSEARCA:ARKK) exchange-traded fund ( ). After the purchases, Ark now owns a total of 10.82 million shares, making it the 29th largest position among all Ark ETFs.
TuSimple was founded in 2015 with a mission to develop safe and efficient autonomous driving (“made history” after becoming the first company to drive a fully autonomous semi-truck on open public roads with no humans on board. Its Driver Out program required the “upfitted self-driving truck to travel on surface streets and highways, to safely navigate traffic signals, emergency lane vehicles, on- and off-ramps, and highway lane changes in open traffic.”) technology for trucks. Last December, the company
However, shares of TSP stock are down more than 75% year-to-date (). That’s partially stemming from a class action lawsuit. Let’s get into the details.
Cathie Wood Keeps Buying TSP Stock
TuSimple is currently in the midst of a class action lawsuit. The lawsuit stems from an incident last August that saw a TuSimple truck leave its lane with no warning and crash into a cement barrier. TuSimple sought to place the blame on “human error.” However, the Wall Street Journal believes differently, writing, “it was the autonomous-driving system that turned the wheel and that blaming the entire accident on human error is misleading.”
The complaint states that TuSimple overstated its commitment to safety and rushed to bring its problematic product to market while overlooking precautions. It also alleges that the company brought its product to market too quickly in a bid to compete with other AD companies. As a result of the safety issues, TSP stock shareholders have suffered losses. They have until Oct. 31 to join the lawsuit.
Meanwhile, Wall Street analysts share Wood’s upbeat opinion on TSP stock. The company has an average price target of $20.91 among 13 firms with coverage of shares. Based on today’s closing price of $7.11, that implies massive upside of around 194%. Still, the most recent price target update is rather bearish. On Sept. 15, Bernstein analyst David Vernon lowered his price target to $10.36 from $23 per share.
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.