Cepton: Not Worth The 25% Dilution Risk
Summary
- Cepton's deal with GM to supply lidar for the OEM's Ultra Cruise ADAS is a major customer win, but supply volumes will be very low to start.
- Cepton is spending about $8 million to generate $1 million in revenue, an unsustainable rate as lidar product revenues will take at least four quarters to scale.
- A $100 million convertible preferred share investment from Koito provides much-needed cash, but also opens the door for nearly 25% dilution.
- Given the risks to commercialization and rising competition, dwindling cash, and dilution, Cepton does not look to be worth the risk.
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