VLDR stock is having a couple of red days, will the negative trend continue?
After completing SPAC merger with Graf Industries some of the early investors decided to take the profits and Velodyne Lidar (NASDAQ:VLDR) share price went down fast.
What is Velodyne Lidar about?
Velodyne Lydar is a LiDAR developer hoping to bank on the future of self-driving and autonomous vehicles. LiDAR is a combination of laser scanning and 3D imaging that can be used, among other things, to scan immediate environment surrounding the vehicle while moving.
“Many people are jumping into the field and throwing big money into it, and there is a rush of new vehicle LiDAR companies,” says Dennis Killinger, a pioneer in lidar and Professor of Physics at the University of Southern Florida. “But major technology changes are still being made.”
VLDR stock faces competition from far east
LiDAR needs to be cheap in order enter a massive production. Once it becomes a new norm this will no longer be tech of the future, it will be a cheap part of every car, such as brake disks. This is both good and bad. Good because everyone will use it, bad because everyone will be able to enter this space and offer even cheaper product. For example, recently a Chinese company called Hesai unveiled its new blind spot detection sensor.
Hesai’s PandarQT blind spot detecting sensor is a 64-channel, ultra-wide FOV LiDAR sensor that features a 104.2° (±52.1°) by 360° ultra-wide Field of View (FOV), making it extremely suitable for vehicle blind spot coverage.source
It is worth noting that German Bosch and other investors poured $173 million into Hesai early this year. And according to this report more than 50% of all California companies testing LiDAR are Hesai clients.
While Velodyne has gone from an idea to products I still look at this company as if it is a startup. There’s a good business here and there’s still a significant partnership with a major automotive manufacturers such as Ford. According to Statista LiDAR market will go from $340M in 2017 to $7 billion in 2028. But it will take 8 years for this. Many people are eager to get rich fast and that is why the selling occurs.
Prior to the ticker change I said I expected a VLDR selloff and this happened, of course. I am sure many of you expected this? And while this was expected I am placing my bets on another crash, even though chart shows that VLDR could try a comeback (which should have happened at $20).
VLDR will report their Q3 2020 financial results for the period ended September 30 in one month, will these number bring any joy to VLDR stockholders? I doubt it.
Anyway, if you want to bet on early stage company you need two thing: Enough cash in your pockets and a lot of trust.