Aurora Innovation Inc (AUR) Stock

Reared on science-fiction classics such as Star Wars or TV dramas like Knight Rider, older millennials have long been fascinated with the concept of autonomous vehicles (AVs) and machinery. However, semiconductor technology at the time was extremely limited, reducing such groundbreaking concepts to mere fantasies.

The rise of advanced application-specific integrated circuits, along with digitalized platforms and machine-learning protocols, has brought the previously impossible notion of self-driving vehicles to the cusp of actualization. In recent years, several companies in the technology and automotive sectors have collectively invested billions of dollars to move the needle forward regarding autonomy and the future of personal and commercial transportation.

To be fair, the COVID-19 pandemic imposed a disruption in the research and development of AVs as government agencies across the world focused on mitigating the damage of the SARS-CoV-2 virus. However, with most countries reporting declining new infections, the autonomy movement is once again capturing the limelight.

One of the latest entries into the self-driving arena is Aurora Innovation Inc. Backed by an advanced lidar (light detection and ranging) system, Aurora seeks to deliver a paradigm shift in AV applications, thereby drawing interest for its initial public offering (IPO).

When Is the Aurora Innovation IPO Date?

One of the hottest public market debuts to hit the IPO calendar this week because of its radically advanced technological solutions, Aurora Innovation is a different animal compared to your traditional IPO. Indeed, retail investors have already had a chance to purchase Aurora shares prior to their launch, which occurs on Nov. 4. But how can that be?

Unlike the common approach for a privately held company to enter the public arena, Aurora Innovation agreed to merge with a special purpose acquisition company (SPAC), in this case Reinvent Technology Partners Y (NASDAQ: RPTY). Announced in mid-July of this year, the business combination will see it command a valuation of $13 billion.

Earlier in March, Reinvent Technology announced the terms of its IPO, distributing 85 million shares at a price of $10 per unit. Prior to its public debut, the SPAC’s prospectus with the U.S. Securities and Exchange Commission (SEC) disclosed that the blank-check firm sought a merger with a business “operating in the technology sectors.”

Morgan Stanley (NYSE: MS) provided lead bookrunning services while Academy Securities, AmeriVet Securities and C.L. King & Associates acted as co-managers for the deal.

While SPACs have received a less-than-stellar reputation for their dilutive nature and general underperformance against benchmark indices, they also provide opportunities that would otherwise not be available for retail investors. One of the key reasons why private enterprises choose to go public via a merger with a shell company is that typically, it’s a quicker and less onerous route.

Essentially, SPACs represent a symbiotic relationship with their target enterprises. The latter provides the actual business while the former offers access to the capital market. In other words, it’s a backdoor method to your bread-and-butter IPO.

At the same time, the advantages that private companies enjoy through SPAC combinations can put regular retail investors at a disadvantage. Primarily, the vetting process for such combined entities is less stringent, meaning among many other risk factors, surprises can occur that sponsors failed to red flag.

Invariably, you must judge each SPAC IPO through its own merits. While some SPACs have performed tremendously well, many others have disappointed early shareholders.

Aurora Innovation Financial History

Although levering a small footprint in the grand scheme of technology-based subsegments, AVs nevertheless draw much excitement from the investor community due to the underlying growth projections. According to Mordor Intelligence, the global driverless car market reached a valuation of $20.97 billion in 2020. By 2026, insiders estimate that the sector could hit $61.93 billion. And that’s on the conservative side.

Research firm Facts & Factors released its analysis, which indicates that last year saw the global AV market ping a valuation of $23.33 billion. At the end of 2026, industry experts suggest that the segment could expand to $64.88 billion, which translates to a compound annual growth rate (CAGR) of 22.7%.

You may consider the above statistics upwind catalysts in that they speak to the total addressable market for Aurora Innovation. Moreover, because Aurora features advanced autonomy platforms for both personal and commercial vehicles, AUR stock stands at the ready to deliver substantial gains should the underlying company succeed in its long-term strategies.

Better yet, Aurora enjoys substantial credibility thanks to its partnerships with automotive heavyweights, such as Toyota Motor Corp. (NYSE: TM), Volvo (OTCMKTS: VLVLY) and PACCAR Inc. (NASDAQ: PCAR), the latter manufacturing Peterbilt and Kenworth heavy trucks. Also, Uber Technologies Inc. (NYSE: UBER) also has a partnership with Aurora. The ride-sharing giant, along with Volvo and PACCAR, are investing in the AUR stock IPO.

Admittedly, the present financials for Aurora Innovation are light. However, Aurora CEO Chris Urmson noted recently that management is targeting a $2 billion revenue haul in 2027. Given the projected expansion of AVs by then, it’s not an unreasonable goal based on an initial sniff test.

In addition, plenty of corporate supporters have put serious money into AUR stock. Per data compiled by Crunchbase, Aurora raised $1.1 billion through multiple private funding rounds. Notably, Uber led investors to a $400 million raise on Dec. 7, 2020, while Sequoia Capital contributed toward a $600 million raise in June 2019. Naturally, if the opportunity wasn’t credible, you wouldn’t expect so much enthusiasm from these power players.

Finally, you should be aware that the lock-up period for AUR stock is 4 years. Usually, the stand for an IPO stock is 180 days, signaling to investors that AUR is not a get-rich-quick scheme.

Aurora Innovation Potential

While Aurora Innovation features robust upwind catalysts, it’s the downwind benefits that could help drive AUR stock well above the competition. In a May 2014 study, the National Highway Traffic Safety Administration revealed that “U.S. motor vehicle crashes in 2010 cost almost $1 trillion in loss of productivity and loss of life.”

That’s a truly staggering figure that may have increased over the years due to population expansion and a young adult generation coming of age. Further, the biggest shock to the system may be that the loss of life and property are largely preventable. For instance, alcohol-related crashes are infuriating for their senseless tragedies. Also, fatigue and distracted driving contribute significantly to accidents and traffic fatalities.

Therefore, the beauty of AUR stock is that the underlying business can deliver automation to roadways, facilitating uniformity and security in our transportation networks. Though driving enthusiasts may bitterly complain, AVs can make transportation faster since advanced artificial intelligence protocols and paradigm-shifting lidar solutions perform all the heavy lifting.

Still, achieving full driving autonomy has escaped the clutches of tech firms, in part because it’s extremely challenging for AI protocols to accommodate the myriad variables human drivers can encounter. As well, you should consider the legal consequences of autonomous driving should the platform ever go awry — of course, technology is never perfect from the get-go.

How to Buy Aurora Innovation IPO (AUR) Stock

With AUR stock being a SPAC business combination, current prospective investors must buy shares at the open, which is a straightforward process if you already know how to buy stocks. If not, just follow the steps below.

Step 1: Pick a brokerage.

Virtually all brokerages compete on similar financial incentives such as commission-free trading. Therefore, you should narrow your best brokers to platforms that provide attributes that you care most about.

Step 2: Decide how many shares you want.

IPOs carry significant risk due to various unknowns. Therefore, mitigate downside price action with a balanced share count.

Step 3: Choose your order type.

Before placing your first trade, memorize these market concepts.

• Bid: The buyer’s best offer for a stock.
• Ask: The seller’s lowest acceptable price.
• Spread: The difference between the bid-ask price, the spread indicates market risk as this is also the profit margin for market makers.
• Limit order: Buy or sell requests at a predetermined price, limit orders provide transparency but no execution guarantees.
• Market order: Market orders guarantee fulfillment but only at the prevailing rate.
• Stop-loss order: Stop-loss orders automatically exit your position at either a predetermined price or anything lower.
• Stop-limit order: Stop-limit orders only leave positions at a specified price, but they also carry non-fulfillment risks.

Step 4: Execute your trade.

Follow these steps to execute a market order:

1. Select your action type (buy or sell).
2. Enter the shares you want to acquire (or sell).
3. Hit the Buy (or Sell) button.

Follow the same sequence for limit orders (but include your execution price).

AUR Restrictions for Retail Investors

Review the Financial Industry Regulatory Authority (FINRA) rules on restricted persons before participating in an IPO. Don’t invest in companies in which you have privileged (non-public) information.

AUR Pre-IPO

Companies like ClickIPO democratize the traditional public market debut process by distributing to their members new issues of select enterprises at their initial offering (pre-IPO) price. Pre-merger-announcement SPACs are already priced at their initial rate (usually $10 per unit).

Projected to be a multi-billion-dollar market, autonomous transportation solutions represent the essence of groundbreaking technologies, boding well for Aurora Innovation. That said, many challenges await AV integration, which has always imposed headwinds on the sector. Still, AUR stock features robust support from institutional players, making it an intriguing speculation.