PreMarket Prep Stock Of The Day: Luminar Technologies

Benzinga's PreMarket Prep airs every morning from 8-9 a.m. ET. During that fast-paced, highly informative hour, traders and investors tune in to get the major news of the day, the catalysts behind those moves and the corresponding price action for the upcoming session.

On any given day, the show will cover at least 20 stocks determined by co-hosts Joel Elconin and Dennis Dick along with producer Spencer Israel.

There is nothing hotter than the SPAC (special purpose acquisitions corporation) market and there was nothing hotter than Luminar Technologies LAZR. It has cooled off in today’s session and is the PreMarket Prep Stock Of The Day.

The Company: Luminar Technologies is an autonomous vehicle sensor and software company with the vision to make autonomy safe and ubiquitous by delivering the lidar and associated software that meets the industry's stringent performance, safety and economic requirements.

Early Trading: The common price offering for SPACs is $10. They usually labor in that area until the company to be acquired is announced if the issue is slated to commence trading. Over the past 19 months, Luminar has traded between $9.45 and $13.70 with a majority of the price action just above and below the $10 level.

In anticipation of its official launch date (Dec. 4), the issue rallied from $10.20 to $22.98 as investors piled into the issue based on the performance of the other related issues. It should be noted the volume was steadily increasing over this period of time.

The Hype: On Dec. 2, the issue received a vote of confidence when it was discussed on CNBC by Jim Cramer.

Cramer said Luminar has great prospects and the stock is actually cheap at current levels. He said shares are definitely worth owning, but he suggested starting with a small position and adding to it slowly over time. It should be noted Cramer was referencing the $17 area and not the outrageous levels it has reached.

That instigated a rally from the Dec. 2 closing price of $18 to $22.98 the following day. The rally continued on the first day of trading, up to $40.88 on Monday and it reached $47.80 earlier in today’s session.

See Also: Citron Calls Luminar Technologies A 'Suckers Game,' Sets $20 Price Target

The Ax: The furious price action was too appetizing for noted short seller Andrew Left of Citron Research to ignore. Around 10:43 a.m. ET, Left called the issue a “suckers game” and slapped a $20 price target. By that time, the issue had already retreated from its intraday high of $47.80 and was changing hands at the $41.50 area.

Corresponding Price Action: Within a few minutes of Left’s tweet, it shed $2 to the $39.50 level. The barrage of selling didn't culminate until it bottomed at $36.86 at 11:15 a.m. ET. That is still well above Monday’s low at $33. It has rebounded back to the $38.70 area at publication time, which is well shy of its all-time closing high price from Monday at $40.88.

Looking Forward: Who knows? This issue can and will continue to be volatile for the foreseeable future.

The author of the article has no position in Lumiar Technologies and will not be taking one at all on either the long or short side of the issue.