TuSimple co-founder and former CEO Xiaodi Hou is on a war path in the lead up to Friday’s annual shareholder meeting that will decide the makeup of the company’s board of directors.
Over the past several weeks, Hou has sued TuSimple for control of his voting rights, demanded the company immediately liquidate and return all remaining cash to shareholders, and urged courts to block TuSimple’s ability to transfer funds to China.
Now, Hou is pushing shareholders to change the board, even if that means taking the fight outside the annual meeting. On Monday, Hou wrote an open letter to stockholders alerting them to his plans to launch a written consent process in early 2025 to remove the current board directors and replace them with ones who will support liquidation. This means that even if the six incumbent board directors are re-elected at the upcoming annual meeting, shareholders who want to see change will have the option to try again outside the annual meeting cycle.
TuSimple, meanwhile, has asked shareholders ahead of the annual meeting to re-elect its existing directors as well as approve a plan to stagger the board. This second proposal, if approved, would block any future attempts at removing all board members at once.
TuSimple’s CEO Cheng Lu directed TechCrunch to a statement regarding Hou’s attempts to liquidate the company. The statement outlines TuSimple’s own litigation against Hou’s new autonomous trucking company, Bot Auto, for alleged trade secrets theft and says the liquidation of TuSimple “would likely insulate Mr. Hou…from further litigation, while TuSimple’s existing shareholders would potentially receive only a small fraction of their initial investment.”
“The Company is focused on moving forward and does not believe liquidation will realize the most value to shareholders,” the statement reads.
TuSimple has been embroiled in drama since the autonomous trucking company went public in 2021. This latest chapter began after the startup shut down its U.S. operations and delisted from the stock market at the start of 2024. TuSimple said it planned to relaunch AV testing in China, but instead it parted ways with most of the self-driving team earlier this year. Now, it appears TuSimple is angling to use its U.S. funds — investor cash that the pre-revenue, high-cost business acquired once it delisted — to pay for a new business unit in AI animation and gaming. And shareholders like Hou are not happy about it.
“I write to you today not just as an investor, but as a co-founder who has poured seven years of passion, energy, and personal commitment into making TuSimple a world leader in autonomous driving,” Hou wrote in his letter to shareholders. “Unfortunately, under the company’s current management and board of directors, the chance of achieving that vision is fading fast. Given the extensive list of issues at TuSimple under the current leadership team…I believe liquidation, which could return $1.93 per share (or more) to stockholders, represents the most equitable path forward for all of us.”
TuSimple’s stock was trading Monday on the over-the-counter securities market at $0.40. Hou’s estimation of a nearly $2 return per share is based on previous reporting from TechCrunch that found TuSimple had roughly $450 million in cash remaining in the U.S. as of September.
Hou was ousted from his executive positions in 2022 and resigned from the board in 2023 following accusations that he was attempting to poach staff for a new venture. Hou has maintained he was fired without just cause. He also said he resigned from the board in protest of his successor’s hefty pay package amid mass layoffs at the company.
At the end of November, Hou sued TuSimple and Mo Chen, the company’s co-founder, chief producer, and director, to regain control over his voting rights. Hou has argued that a 2022 voting agreement granting Chen control over his Class B shares expired in 2024, thus reverting his voting rights back to him.
TuSimple and Chen have made the case that while Hou may be in possession of the shares now, he still needs to vote as Chen directs.
The dispute over Hou’s 27.9% stake won’t be solved until the first quarter of 2025, when a hearing is scheduled.
This article, originally published December 16, 1:25 pm PT, has been updated to include a statement from TuSimple.