After Doubling in Value – Innoviz Raises Funds at a 13% Discount

Innoviz Innoviz Technologies -25.79%   is another example of the failed IPO wave of 2021. The company, which develops LiDAR systems for autonomous driving, merged with a SPAC at a $1.4 billion valuation, but without significant orders or financial backing to justify its value, the stock has since dropped by 88%. Over the past year, the stock languished below $1, but several positive announcements, including a minor technology partnership with NVIDIA, an agreement with Mobileye, and an $80 million order over three years, propelled it past $2.

The company remains in a tough cash flow position, expecting to burn around $80 million this year while holding just $88 million in cash and equivalents as of the end of the third quarter. That means the company’s annual cash burn is equivalent to 40% of its $200 million market cap. The recent order will provide some relief, but it’s not enough, prompting Innoviz to capitalize on the stock’s surge to raise funds. The company announced it will issue shares to institutional investors at $1.39 per share—more than double its price just two or three months ago but still a 13% discount from its last closing price. It is also issuing warrants with a strike price of $1.69 per share. Following the news, the stock dropped 26%.

Innoviz expects to raise $40 million. Assuming the company maintains its current cash burn rate, this funding should help balance its cash flow. The company noted that out of the $80 million order it announced, $40 million is expected to be paid in 2025.

Still Burning Cash, While the CEO Fuels Hype on X

The $80 million order wasn’t exactly a surprise. A day before the announcement, CEO Omer Keilaf posted the following message on his personal X (Twitter) account:

While we are aware this week is busy with preparations towards the holiday, we wanted to give you heads up towards a big announcement we are going to share tomorrow pre-market$INVZ 👀 Happy Holidays!

— Omer Keilaf (@KeilafOmer) December 22, 2024

That was on Sunday, and by Monday morning, the stock was surging in pre-market trading. Speculation ran wild, with some even thinking the company was about to announce an acquisition by Mobileye. While unlikely, it wasn’t entirely out of the question. Innoviz, after all, remains an unprofitable company with no significant orders, yet it already has ties with Mobileye on multiple projects. Those collaborations expanded after Mobileye shut down its own LiDAR division. Add to that the fact that both companies and their leadership teams are Israeli, making communication easier, and an acquisition doesn’t seem completely far-fetched.

Mobileye could theoretically integrate Innoviz and leverage its existing customer relationships, but as long as Innoviz struggles to prove its product’s quality and market demand, there’s little reason for Mobileye to make such a move—especially when it is dealing with its own challenges.

Keilaf’s tweet was irresponsible, though technically legal, according to attorney Gil Churchi, a partner at Weksler Bergman Law Firm. "Keilaf didn’t disclose any material information, so on the surface, it’s legal. But he did express an opinion, which could raise concerns at the SEC," Churchi told us in a conversation. Regardless of its legality, it wasn’t a responsible move. Keilaf should focus on securing orders, managing cash flow, and stabilizing the company—not creating hype on social media.

עוד תכניות

Financials Are Improving, but Challenges Remain

Despite the uncertainty, Innoviz’s numbers are showing some improvement. Third-quarter revenue in 2024 reached $4.5 million, up from $3.5 million in the same quarter last year. The company also managed to trim operating expenses from $27.8 million to $26 million. For the full year, Innoviz expects revenue between $23.5 million and $25 million, reflecting 16% growth at the midpoint. Analysts project revenue of $24.14 million.