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Investing.com - JPMorgan downgraded Luminar Technologies (NASDAQ:LAZR) stock rating to Underweight from Neutral following a series of negative developments that raise concerns about the company’s financial stability. The stock has plummeted 90.27% over the past year and currently trades at $1.16, near its 52-week low of $1.08, according to InvestingPro data.
The lidar technology company missed a quarterly interest payment on its second lien senior secured notes due October 15, which resulted in an event of default on October 30 after a 15-day grace period expired. InvestingPro identifies this as a critical concern, noting the company "operates with a significant debt burden" of $451.66 million while "quickly burning through cash."
Luminar has entered a short-term forbearance agreement until November 6, providing limited time to negotiate a longer-term solution to its debt obligations.
Adding to the company’s challenges, Volvo, described as Luminar’s anchor automaker customer, has decided to demote Luminar’s Iris LiDAR sensors from standard to optional equipment on its EX90 and ES90 models effective April 2026.
Volvo has also deferred decisions regarding LiDAR inclusion for its next-generation vehicle lineup planned for 2027-2029, further clouding Luminar’s future revenue prospects.
In other recent news, Luminar Technologies reported its financial performance for the second quarter of 2025, with revenue totaling $15.6 million, representing a 5% decline compared to the previous year. Despite the decrease in revenue, the company’s stock experienced a notable increase. Additionally, Luminar disclosed entering into forbearance agreements with holders of its senior secured notes following missed interest payments. The agreements involve holders of approximately 94.5% of its Floating Rate Senior Secured Notes due 2028 and about 89% of its Convertible Second Lien Senior Secured Notes due 2030. These agreements temporarily prevent noteholders from taking legal action concerning the missed payments, with the forbearance period extending through November 6. Furthermore, Luminar announced a planned 25% workforce reduction and the upcoming departure of its Chief Financial Officer. These developments come as the company navigates financial challenges and seeks longer-term solutions with its creditors.
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