Pony AI, a Chinese self-driving car company, is holding its initial public offering (IPO) in New York today (November 27).
Don't Miss our Black Friday Offers:
- Unlock your investing potential with TipRanks Premium - Now At 40% OFF!
- Make smarter investments with weekly expert stock picks from the Smart Investor Newsletter
The stock begins trading on the Nasdaq Global Select Market under the ticker symbol “PONY.” The IPO was underwritten by investment banks Goldman Sachs (GS) and Bank of America (BAC). Pony AI is making its market debut with a $4.5 billion valuation.
Pony AI is selling 20 million American depositary shares at $13 each, which is at the high-end of the expected range. Gross proceeds from the IPO, including private placements, are expected to total about $413 million, according to the underwriters.
The Future of Driving?
Pony AI manufactures sensors and software for self-driving vehicles. It currently operates a fleet of 250 robotaxis and 190 robotrucks within China and has partnered with Toyota Motor Corp. (TM) to develop self-driving vehicles that can eventually be mass produced.
Pony AI claims to use AI-trained software with sensing hardware including global positioning systems, optical cameras, radar, and laser-based radar (lidar) to operate its self-driving vehicles. The company’s AI-trained approach is similar to Tesla’s (TSLA) self-driving technology. Tesla plans to launch robotaxi service in the U.S. next year and is a competitor of Pony AI.
Pony AI reported a loss of $93.9 million and revenue of $39.5 million for the nine months ended September 30 of this year. Much of the company’s revenue comes from technology licensing.
Is TSLA Stock a Buy?
With Pony AI’s stock just starting to trade, we take a look instead at Tesla, one of its biggest competitors in the self-driving vehicle space. The stock of Tesla currently has a Hold rating among 34 Wall Street analysts. That rating is based on 11 Buy, 14 Hold, and nine Sell recommendations issued in the last three months. The average TSLA price target of $233.67 implies 29.39% downside risk from current levels.
