Text measurement
QuantumScape, the electric-vehicle battery-technology firm, filed to promote as many as 15 million extra shares.
Andrius Aleksandravicius/Dreamstime
QuantumScape,
the electric-vehicle battery-technology firm, introduced it was selling more stock. The resolution is hitting shares in after hours buying and selling.
That dip isn’t a shock. Stock gross sales by startups are likely to drive the worth of shares down for some time. QuantumScape (ticker: QS) inventory is down about 8% in after hours buying and selling. In common buying and selling Monday, shares of the maker of solid-state, lithium anode batteries rose greater than 8% on a typically good day for tech shares. The
Nasdaq Composite Index,
as an illustration, rose 1.2%. The
S&P 500
rose 0.7%.
The capital increase is a bit of a shock. QuantumScape closed its merger with a special-purpose acquisition firm in late November, only a few months in the past. The merger introduced about $700 million into firm coffers. The firm ended 2020 with roughly $1 billion on the steadiness sheet.
That is greater than sufficient to get by way of this 12 months 12 months, as the corporate announced plans to spend about $260 million in 2021 to develop its applied sciences. What’s extra, QuantumScape has one other $200 million or so coming in as warrants, that are half of most SPAC mergers, are exercised.
But QuantumScape remains to be years away from commercialization. QuantumScape didn’t instantly reply to a request for touch upon why the providing was wanted, and its timing.
The firm plans to subject as much as about 15 million shares, together with the choice usually granted to underwriters to promote a bit of extra inventory if demand is excessive. That would quantity to greater than $950 million based mostly on Monday’s closing worth, successfully doubling the corporate’s money steadiness.
The deal appears to be like like a sound strategic transfer, however one that may go away traders questioning what the timing means for the worth of their place. It might be a reminder to traders that younger high-growth firms usually want exterior financing. They don’t generate sufficient money circulation on their very own but.
QuantumScape has about 448 million shares excellent, together with warrants which might be prone to be transformed. The 15 million extra shares represents about 3% of the entire shares excellent.
QuantumScape inventory has been on a wild ride currently. The inventory hit $132.73 in December earlier than tumbling to commerce beneath $45 earlier in March. Shares closed at $64.29 Monday, earlier than the deal was introduced.
Write to Al Root at allen.root@dowjones.com
