Home Investing TuSimple Holdings stock on a downward spiral on looming layoffs

TuSimple Holdings stock on a downward spiral on looming layoffs

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After losing nearly 96% year-to-date, TuSimple Holdings Inc. (NASDAQ:TSP) stock decline could be far from over. Stock market reports over the weekend indicated that the company was looking at cutting 50% of its workforce. About 700 employees are expected to be declared redundant by the self-driving trucking company.

Earlier this month, TuSimple ended its deal with Navistar in another blow to the company. The deal was for a co-development of self-driving trucks. The development happened despite the company targeting the initial sale of its trucks next year. Again, in October, the FBI and SEC probed the company over links with China’s Hydron Inc.

The wave of negative stock news continues to weigh on the stock, which trades at just $1.60. The company went public in April 2021, with the shares opening at $40.25, above an IPO price of $40 per share.

While it is too early to cast a stone on TSP, it will take a while before investors see a path to recovery. The idea also comes amid a product portfolio in its early stages and current woes in the automobile sector. Consequently, the Bank of America has assigned a price target of $1.00 for the stock.

TSP is on a clear downtrend amid oversold conditions

TSP Stock Chart by TradingView

A technical outlook shows that TSP is on a prolonged downtrend. The stock has been making a wave of lower highs and lower lows. TSP has always faced resistance at the 20-day or 50-day moving averages.

Investor interest in TSP looks very minimal, owing to the oversold signals. The RSI has stayed at the oversold level for nearly two months.

What next for TuSimple stock?

TuSimple stock could stay subdued as long as the market remains bearish. The confidence crisis from negative developments makes investing in TSP unfavourable at the moment.

BofA sees the bear market playing out to $1. The stock is in a bottomless drop amid reports of looming workforce cuts.

The post <strong>TuSimple Holdings stock on a downward spiral on looming layoffs</strong> appeared first on Invezz.

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