Aurora Innovation: De-SPAC Pain Ahead
- Aurora Innovation is working to close a business combination with Reinvent Technology Partners Y.
- The stock has an implied equity valuation of $13 billion with $11 billion assigned to the value of Aurora Innovation.
- The company lacks material commercial operations until 2026 limiting the likely positive view on the stock for years.
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The self-driving technology sector is one of the hottest areas for investment, but the SPAC pathway to the public markets isn't rewarding shareholders in the short term. Market leader Aurora Innovation agreed to a business combination with Reinvent Technology Partners Y (RTPY) back in July and the recent price isn't suggestive of a great outcome to the de-SPAC transaction. My investment thesis is Neutral on the stock until after the deal is done, especially at this valuation.
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