Nnn The shares of companies in the development phase do not belong to the public market. Quantum landscape (NYSE:QS) the inventory is part A.
Quantumscape is trying to develop a new type of lithium-ion battery, a solid battery, devoid of dendrites, needle-like structures that affect the performance of current designs and can lead to explosions.
Quantumscape has been working on this for 10 years. Although they have made progress, they are far from production. There are none of the metrics that investors use to value a business.
Your guess is as good as mine. In the meantime, when you buy QS stocks you have to know what you are buying, which is not much.
The craze for the Special Purpose Acquisition Company (SPAC) was overwhelming, and to raise $ 680 million in new capital, QS shares went public through Kensington Capital Acquisition. Last year.
A closer look at QS Stock
Since then, the race has been epic. You could have paid $ 14 for this SPAC last November. You could have sold $ 130 at the end of December, or you could have bought at that time and looked for stocks worth less than $ 35.
How you feel about the ride has everything to do with when you got on and if you got off.
You could have bought in early February at $ 44 and sold a few weeks later at $ 57. You could have bought at the height of this move, for $ 66, then resell for $ 32 after short seller Scorpion Capital called Quantumscape a “Pumping and emptying system. ”
During all of this, Quantumscape the company did nothing of importance. His people continued to work. Lots of coffee was drunk, but there was little real news.
The biggest release came on March 31, when Quantumscape said it reached a technical milestone and closed a $ 100 million investment of Volkswagen (OTCMKTS:VWAGY).
It was under an agreement signed for the first time the previous month of May. This happened a few days after a secondary offer of shares made $ 478 million. Quantumscape has since added a battery expert Celina Mikolajczak to its board of directors.
Any business that needs capital will do anything to attract it. Quantumscape signed the agreement with Volkswagen six months before its publication.
It burned $ 1.1 billion in 2020, although only $ 81 million represented operating expenses. He ended the year with around $ 1 billion in cash and marketable securities.
Scorpion spoke to 9 former Quantumscape researchers and concluded that the company has not made a breakthrough. He called false claims that his material is dendrite-resistant, charges very quickly, can be recharged over 1,000 times, and performs well at low temperatures.
Scorpio might be right. But Quantumscape may also be on the verge of achieving its goals. This is the conclusion of our Chris Lau. Tezcan Gecgil believes the stock will bounce around its current level until there is good news.
Other Investor place writers are more bearish. Alex Sirois says the business has a long way to go. Ian Bezek describes it as “non-investable”. Josh Enomoto says there is no frame of reference to assess it and he is right.
The result on QS Stock
All of our authors are right. We are also all wrong.
No one knows how close Quantumscape is to proving its claims. Even CEO Jagdeep Singh may not know.
Quantumscape is like a biotech company with a promising therapy in a first stage trial. The thing can work. The thing cannot.
The question should not be asked of public investors at all.
This is a growing business that needs to be reviewed by people with enough capital to place 10 big bets in the hopes of making a big score.
Quantumscape should be doing its presentation to VCs around a large table overlooking the mountains, not to you and me.
At the time of publication, Dana Blankenhorn does not directly own any shares, directly or indirectly, in any of the companies mentioned in this article.
Dana blankenhorn has been a financial and technology journalist since 1978. He is the author of The Big Bang of Technology: Yesterday, Today and Tomorrow with Moore’s Law, available from the Amazon Kindle Store. Write to him at [email protected], tweet it on @danablankenhorn, or subscribe to its Substack https://danafblankenhorn.substack.com/.