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By Sam Boughedda
Investing.com — Velodyne Lidar (NASDAQ:VLDR) stock jumped over 27% Tuesday on the news an Amazon (NASDAQ:AMZN) subsidiary has acquired a warrant to buy 39.6 million shares in the Silicon Valley-based sensor technology company.
After hours on Monday, following the announcement, Velodyne's shares rose 127% before giving up the majority of those gains. Velodyne shares have had a difficult 12 months, falling 84% on management difficulties, including the resignation of its CEO and a lawsuit from former executives regarding its 2020 SPAC merger.
The warrant, issued to Amazon.com NV Investment Holdings LLC, a wholly-owned subsidiary of Amazon, may be exercised at any time before February 4, 2030, at an exercise price of $4.18 per share.
Velodyne said in its press release that the warrant shares will be vested over time based on discretionary payments to Velodyne by Amazon of up to $200 million.
While the deal has provided a short-term bounce in Velodyne's share price, what it actually means going forward is another matter. As pointed out by BofA analyst John Murphy, Amazon frequently makes minority investments in companies via warrants. Furthermore, there is a lack of detail in the announcement, and so it may be too early to come to any solid conclusions about the future of Velodyne.
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