May 30, 2024 activistcompany

Dr. Hou Challenges Mo Chen’s Control, Calls for Liquidation at TuSimple Holdings (TSP)

Key Summary: Dr. Xiaodi Hou disputes Mo Chen’s voting control post the expired Proxy Voting Arrangement (Nov 9, 2024) and secured a court order restricting asset transfers and governance changes. Hou calls for liquidation, citing mismanagement, a 91% stock decline, and asset transfers, while launching SaveTuSimple.com to inform stockholders. On May 30, 2024, Camac Fund (5.6%) urged returning excess cash ($2.5/share), reviewing strategic alternatives, and leveraging net operating losses to enhance shareholder value. Mo Chen (19.1%), under a Jan 16, 2024 Cooperation Agreement, supports independent director oversight and faces restrictions during a two-year Standstill Period amid the company's delisting and deregistration process.

Market Cap: $93 million | TuSimple Holdings Inc., an autonomous technology company, develops autonomous technology specifically designed for semi-trucks in the United States and Asia-Pacific region.

Xiaodi Hou

Dr. Hou, co-founder and former executive officer of the company, disputes Mo Chen’s control of voting power under the expired Proxy Voting Arrangement as of November 9, 2024. Dr. Hou filed for a Temporary Restraining Order (California TRO) to block a $150M transfer of assets to China and initiated a Delaware Action to confirm voting control over 29.7% of shares. The Delaware Chancery Court issued a Status Quo Order restricting asset transfers, mergers, and governance changes without notice. Dr. Hou publicly called for the company’s liquidation, citing mismanagement, a 91% share price decline, and questionable asset transfers to China. He plans to initiate a consent solicitation to replace the Board, except for Mr. Schultz, with independent directors and proposes orderly liquidation. Dr. Hou has launched SaveTuSimple.com to inform stockholders. Source

Camac Fund

On May 30, 2024, Camac Fund (5.6%) issued a press release expressing concerns about the board's governance and indicated readiness to take actions in shareholders' best interests. They recommended immediate actions to enhance shareholder value, including (i) returning excess cash, estimated at over $2.5 per share as of May 2024, due to the stock trading significantly below this value, (ii) initiating a strategic review to explore options for either monetizing or winding down the company's ongoing business operations, given the significant investment and lack of clear commercial viability, and (iii) collaborating with third parties to assess opportunities for maximizing the value of TuSimple's substantial net operating losses.

Mo Chen

On January 16, 2024, Mo Chen (19.1%), the Executive Chairman of the Company's Board of Directors, entered into a Cooperation Agreement with the Company. This agreement, negotiated with a special committee of independent directors, pertains to the delisting and deregistration of the Company's Class A Common Stock. It mandates changes to the Company's Bylaws to ensure at least three independent directors and approval requirements for transactions involving Mr. Chen or Chen Affiliates. During the two-year Standstill Period, Mr. Chen commits to voting in favor of the Company's independent director nominees, while restrictions are placed on his ownership and participation in Extraordinary Transactions, ensuring equitable terms for Common Stock and other equity securities.

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