(Original article: Barrons.com) QuantumScape’s amazing rise continued this past week, like a gift from a market Santa. Shares of the electric-vehicle battery maker closed at $131.67, up another 39% after rallying 29% on Monday. The stock gained almost 70% over one week, and 390% since going public in late November.
On Tuesday, Quantum stock was worth $59 billion, based on fully diluted 448 million pro forma shares outstanding. The company passed rivals, including LG Chem , Samsung SDI and Panasonic, in market value. One exception: China’s Contemporary Amperex Technology, which was worth roughly $110 billion. But Quantum was also larger in market value than Ford Motor and General Motors, every auto component of the Russell 3000 except Tesla, and two of the largest auto-parts companies in the world, Japan’s Denso and Germany’s Continental. The shares fell back later in the week to a market cap of $51 billion.
The shares fell back later in the week to a market cap of $51 billion.
QuantumScape went public in a merger with a special purpose acquisition company, or SPAC, Kensington Capital Acquisition. GMO’s Jeremy Grantham invested $12.5 million in QuantumScape seven years ago through his foundation, a 4.8-million-share stake now worth $551 million. (GMO confirmed that he still owns all the stock.) Grantham dislikes SPACs, he told the Financial Times, but the stake “accidentally” turned into the largest investment he has ever made.
What’s really driving the shares? Anecdotally, there isn’t much stock to borrow, which suggests a short squeeze. And EVs and batteries are hot right now. Tesla continues to rise, and Reuters reported that Apple plans to enter the EV market by 2024, with its own battery technology, which might compete with Quantum’s. Or maybe it’s just Santa.