Super-voters override self-driving truck controls

NEW YORK (Reuters Breakingviews) – If only it weren’t so easy to see what’s behind the latest mess at TuSimple. The self-driving truck technology developer has descended into corporate governance chaos after the ousted chief executive, Xiaodi Hou, turned around and fired the entire board of directors. The situation was made possible by a dual-class share structure that gives Hou and his co-founder Mo Chen 59% voting control despite their far smaller economic stakes.

The boardroom cleanout, which includes a director installed as part of a deal with the U.S. government, triggers a potential delisting from Nasdaq because there’s now an insufficient number of independent members. TuSimple says it intends to become compliant, but this debacle deepens the company’s swift reversal of fortune. TuSimple achieved a nearly $8.5 billion market value when it went public in April 2021; it’s now worth about $640 million.

Investors increasingly have been too willing to accept second-class status and cede power to entrepreneurs. When capital is dearer and leadership decisions get more questionable, the risks of such acquiescence inevitably become clearer. The proliferation of supervoting stock means TuSimple shareholders won’t be the last to get hit hard. (By Jeffrey Goldfarb)

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(Editing by Lauren Silva Laughlin and Amanda Gomez)

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