Luminar Stock Is Getting Crushed After Founder's Abrupt Exit

Shares of lidar maker Luminar Technologies (NASDAQ: LAZR) were trading sharply lower on Thursday morning, after the company announced that its founder would depart following an internal investigation.

As of 10:30 a.m. ET, Luminar's shares were down about 17.6% from Wednesday's closing price.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

Luminar's visionary founder left abruptly after a board investigation

Luminar said late on Wednesday that its founder, chairman, and CEO, Austin Russell, had resigned effective immediately "following a code of business conduct and ethics inquiry" by the board of directors' audit committee.

Austin Russell was Luminar's founder and CEO -- and the face of the company -- until Wednesday night. Image source: Luminar Technologies.

Russell will remain on Luminar's board. The company said the matter does not impact any of its financial results.

Russell will be succeeded on May 21 by Paul Ricci, the longtime CEO of artificial intelligence (AI) speech company Nuance Communications. (Nuance was acquired by Microsoft in 2022.) Thomas Fennimore, Luminar's CFO, will serve as interim chief until Ricci's start date, the company said.

This isn't good news for Luminar stock

This is very big news for Luminar and it raises some hard questions about the case for the stock.

Russell was the visionary behind the company's products and strategy, and his connections and industry reputation were a big part of the investment case for Luminar. While Ricci is no slouch, it'll take time for him to get up to speed on Luminar and its specialized corner of the industry -- and the company's business could well suffer in the meanwhile.

It won't help that the auto industry -- Luminar's market -- is being cautious about spending amid uncertainty about the Trump administration's tariff plans.

I wouldn't dump the stock just yet. But if you've been thinking about buying, or buying more, I'd wait a bit to see how this plays out.

Should you invest $1,000 in Luminar Technologies right now?

Before you buy stock in Luminar Technologies, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Luminar Technologies wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $620,719!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $829,511!*

Now, it’s worth noting Stock Advisor’s total average return is 962% — a market-crushing outperformance compared to 170% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of May 12, 2025

John Rosevear has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Microsoft. The Motley Fool recommends the following options: long January 2026 $395 calls on Microsoft and short January 2026 $405 calls on Microsoft. The Motley Fool has a disclosure policy.