Aurora Announces Pricing of $420 Million Upsized Public Offering of Class A Common Stock

Rhea-AI Summary

Aurora Innovation (Nasdaq: AUR) has announced the pricing of its upsized public offering of 116,666,667 shares of Class A common stock at $3.60 per share. The company expects to raise approximately $420 million in gross proceeds, before deducting underwriting discounts and expenses. Aurora has also granted underwriters a 30-day option to purchase up to an additional 17,500,000 shares. The offering is set to close around August 2, 2024, subject to customary conditions. Goldman Sachs, Allen & Company, and Morgan Stanley are acting as joint book-running managers for the offering. Aurora has filed the necessary documents with the SEC, including a Registration Statement on Form S-3 and a preliminary prospectus supplement.

Positive

• Upsized public offering expected to raise approximately $420 million in gross proceeds
• Additional 30-day option for underwriters to purchase up to 17,500,000 more shares
• Involvement of reputable financial institutions as joint book-running managers

Negative

• Potential dilution of existing shareholders' stake due to the large number of new shares being issued
• Stock price set at $3.60 per share, which may be below current market value
• Increased outstanding shares may put downward pressure on stock price in the short term

Insights

Financial Analyst

Aurora Innovation's upsized public offering of $420 million through the sale of 116,666,667 shares of Class A common stock at $3.60 per share is a significant move that warrants attention. This capital raise comes at a important time for the autonomous vehicle industry, which is capital-intensive and requires substantial funding for research, development and commercialization efforts.

The pricing of $3.60 per share represents a slight discount to the recent trading price, which is typical for secondary offerings to attract investors. The additional 30-day option for underwriters to purchase up to 17,500,000 more shares could potentially increase the total proceeds by $63 million, bringing the maximum possible raise to $483 million.

This substantial cash injection will likely be used to:

• Accelerate Aurora's autonomous technology development
• Expand testing and validation programs
• Strengthen the company's balance sheet for future operations
• Potentially fund strategic partnerships or acquisitions

However, investors should note that this offering will result in significant dilution for existing shareholders. The addition of 116,666,667 new shares (potentially up to 134,166,667 with the underwriters' option) will increase the outstanding share count substantially, which could put downward pressure on the stock price in the short term.

The involvement of major underwriters like Goldman Sachs, Allen & Company and Morgan Stanley lends credibility to the offering and suggests strong institutional interest. This could be seen as a vote of confidence in Aurora's long-term prospects, despite the current challenging market conditions for tech and growth companies.

Overall, while the capital raise strengthens Aurora's financial position, investors should carefully consider the dilutive effects and the company's ability to effectively deploy this capital to generate future value.

Tech Expert

Aurora Innovation's substantial $420 million capital raise through this public offering is a strategic move that could significantly impact the company's position in the highly competitive autonomous vehicle (AV) sector. This influx of capital comes at a critical juncture for Aurora, as the AV industry is rapidly evolving and requires massive investments to stay at the forefront of innovation.

From a technological perspective, this funding could be pivotal for Aurora in several ways:

• Accelerated R&D: The additional capital can fuel more aggressive research and development efforts, potentially leading to breakthroughs in key areas such as perception systems, decision-making algorithms and safety features.
• Expanded Testing: Aurora can now invest in more extensive real-world testing across diverse environments and conditions, important for refining and validating their AV technology.
• Talent Acquisition: In the competitive tech labor market, this funding allows Aurora to attract and retain top-tier engineering talent, which is essential for innovation and problem-solving in the complex AV space.
• Hardware Development: The company could allocate funds to develop or acquire cutting-edge hardware components, such as more advanced LiDAR systems or powerful onboard computers, to enhance their AV capabilities.

However, it's important to note that while capital is crucial, it doesn't guarantee success in the AV race. Aurora will need to demonstrate efficient capital allocation and tangible technological progress to justify this significant dilution to shareholders. The company's ability to translate this financial boost into concrete advancements in their AV technology stack will be closely watched by investors and industry observers alike.

In the broader context of the AV industry, this substantial raise by Aurora could potentially trigger a new round of funding activities among competitors, as companies strive to maintain their competitive edge in this capital-intensive sector. It also signals continued investor confidence in the long-term potential of autonomous vehicle technology, despite recent market challenges and regulatory hurdles faced by the industry.

Market Research Analyst

Aurora Innovation's $420 million upsized public offering signals a significant shift in the autonomous vehicle (AV) market landscape. This substantial capital injection comes at a time when the AV sector is experiencing both excitement and skepticism, making it a noteworthy event for industry watchers and investors alike.

Key market implications of this offering include:

• Investor Sentiment: The successful pricing of this large offering, especially in a challenging market for tech stocks, suggests there's still strong investor appetite for AV companies with promising technologies. This could potentially reignite interest in the broader AV sector.
• Competitive Dynamics: With this fresh capital, Aurora is positioned to potentially leapfrog competitors or at least maintain its competitive stance. This could prompt other AV companies to seek additional funding to keep pace, potentially leading to a new wave of capital raises in the sector.
• Market Consolidation: The influx of capital might enable Aurora to consider strategic acquisitions, potentially accelerating market consolidation in the fragmented AV technology space.
• Commercialization Timeline: This funding could accelerate Aurora's path to commercialization, potentially shortening the timeline for widespread AV adoption. This has implications for various adjacent industries, from automotive to logistics and urban planning.

However, it's important to contextualize this offering within broader market trends. The AV sector has seen its share of setbacks, with some high-profile companies scaling back ambitious timelines for full autonomy. Aurora's ability to secure this funding despite these headwinds suggests either a compelling technological advantage or a well-articulated long-term strategy that resonates with investors.

Moreover, the pricing of $3.60 per share provides an interesting data point on how the market is valuing AV companies in the current environment. This valuation benchmark could influence future funding rounds and M&A activities in the sector.

In conclusion, while this offering strengthens Aurora's position, it also raises the stakes. The market will be closely watching how effectively the company deploys this capital to drive technological advancements and move closer to viable commercial applications of its AV technology.

PITTSBURGH--(BUSINESS WIRE)-- Aurora Innovation, Inc. (Nasdaq: AUR) today announced the pricing of its underwritten upsized public offering of 116,666,667 shares of its Class A common stock at $3.60 per share. All of the securities are to be sold by Aurora. In addition, Aurora has granted the underwriters a 30-day option to purchase up to an additional 17,500,000 shares of its Class A common stock at the public offering price, less the underwriting discounts and commissions. Before deducting the underwriting discounts and commissions and estimated offering expenses, Aurora expects to receive gross proceeds of approximately $420 million from the public offering, assuming no exercise of the underwriters’ option to purchase additional shares. The offering is expected to close on or about August 2, 2024, subject to satisfaction of customary closing conditions.

Goldman Sachs & Co. LLC, Allen & Company LLC and Morgan Stanley are acting as joint book-running managers and Evercore ISI, Canaccord Genuity, TD Cowen and Wolfe | Nomura Alliance are acting as book-runners for the offering.

Aurora filed a Registration Statement on Form S-3 which was declared effective by the U.S. Securities and Exchange Commission (the “SEC”), and has filed a preliminary prospectus supplement and accompanying prospectus relating to and describing the terms of the underwritten public offering. A final prospectus supplement and accompanying prospectus relating to the offering will also be filed with the SEC. These documents can be accessed for free through the SEC’s website at www.sec.gov. When available, copies of the final prospectus supplement and the accompanying prospectus relating to the underwritten public offering may also be obtained from: Goldman Sachs & Co. LLC, Attention: Prospectus Department, 200 West Street, New York, New York 10282-2198; Allen & Company LLC, Attention: Prospectus Department, 711 Fifth Avenue New York, New York 10022; or Morgan Stanley & Co. LLC, Attention: Prospectus Department, 180 Varick Street, 2nd Floor, New York, NY 10014.

This press release does not constitute an offer to sell or a solicitation of an offer to buy, nor will there be any sale of these shares of Class A common stock in any state or other jurisdiction in which such offer, solicitation, or sale would be unlawful before registration or qualification under the securities laws of any such state or jurisdiction.

About Aurora

Aurora (Nasdaq: AUR) is delivering the benefits of self-driving technology safely, quickly, and broadly to make transportation safer, increasingly accessible, and more reliable and efficient than ever before. The Aurora Driver is a self-driving system designed to operate multiple vehicle types, from freight-hauling trucks to ride-hailing passenger vehicles, and underpins Aurora’s driver-as-a-service products for trucking and ride-hailing.

Forward-Looking Statements

This press release contains forward-looking statements as that term is defined in Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Such statements include, but are not limited to the timing and size of the offering. These forward-looking statements are neither promises nor guarantees and are subject to a variety of risks and uncertainties, including but not limited to: whether or not Aurora will be able to raise capital through the sale of Class A common stock or consummate the proposed offering; and its expectations with respect to granting the underwriters a 30-day option to purchase additional shares of Class A common stock; the satisfaction of closing conditions; and other risks. Information regarding the foregoing and additional risks are described in the Risk Factors sections of the preliminary prospectus supplement for the underwritten public offering filed with the SEC, and the documents incorporated by reference therein, including without limitation those risks and uncertainties identified in the “Risk Factors” section of Aurora’s Registration Statement on Form S-3 declared effective by the SEC on January 8, 2024, the accompanying prospectus, Aurora’s Annual Report on Form 10-K filed with the SEC on February 15, 2024, as amended by Aurora’s Form 10-K/A filed with the SEC on May 24, 2024, and other filings that Aurora makes with the SEC from time to time. All forward-looking statements reflect Aurora’s beliefs and assumptions only as of the date of this press release. Aurora undertakes no obligation to update forward-looking statements to reflect future events or circumstances.

View source version on businesswire.com: https://www.businesswire.com/news/home/20240801604479/en/

Investor Relations:

Stacy Feit

ir@aurora.tech

Media:

press@aurora.tech

Source: Aurora Innovation, Inc.

FAQ

How many shares of Class A common stock is Aurora (AUR) offering in its public offering?

Aurora (AUR) is offering 116,666,667 shares of Class A common stock in its upsized public offering.

What is the price per share for Aurora's (AUR) public offering announced on August 2, 2024?

The price per share for Aurora's (AUR) public offering is $3.60.

How much does Aurora (AUR) expect to raise from its public offering?

Aurora (AUR) expects to raise approximately $420 million in gross proceeds from the public offering, before deducting underwriting discounts and expenses.

When is the expected closing date for Aurora's (AUR) public offering?

The public offering is expected to close on or about August 2, 2024, subject to customary closing conditions.

Who are the joint book-running managers for Aurora's (AUR) public offering?

Goldman Sachs & Co. , Allen & Company , and Morgan Stanley are acting as joint book-running managers for Aurora's (AUR) public offering.