Yahoo Finance’s Brian Sozzi, Myles Udland, and Julie Hyman discuss the market action for QuantumScape, and QuantumScape CEO Jagdeep Singh's recent remarks.
MYLES UDLAND: An hour into today's trading session, we see all three majors are higher. Now a stock that has been all over the place in the last couple of weeks, mostly down in the last couple of weeks, is QuantumScape. Brian Sozzi, their CEO joined the program a couple weeks ago. We talked about the crazy moving the stock. It's almost been cut in half since then, and I know you just got off the phone with the company's CEO.
BRIAN SOZZI: Yeah, that's right, Myles. So he not only joined our program, he also joined my iPhone. That's Jagdeep Singh, literally about five minutes ago. And I asked him, you know, the stock sold off 41% yesterday. And now he's telling me that there's been no change in business. Everything the company has discussed with investors remains the same. I put out that tweet, and now QuantumScape shares are up 12% on that news.
Where there was, does appear to be some confusion, they filed an S-1 on December 31. And the market interpreted that as they're selling new shares. Now they put out a clarification on this today on their website. They're not selling new shares. Essentially what they did, and I'm going to read off the PowerPoint, they filed a resell S-1. And the purpose of this was to permit the resale of shares that were already issued or that may be issued on the exercise of options and warrants they already issued.
So again, no new shares being issued, despite that's what the market interpreted initially when the S-1 was filed. No change in business. Now Singh does tell me he hates, quote, hates to see that type of market reaction yesterday. But again, he remains very focused on getting his battery technology road tested and moving forward, very much in line with what we just talked to him a couple weeks ago.
MYLES UDLAND: Yeah, I mean, look, this thing was a SPAC, so it came public at $10 bucks a share. It's still up 5X from there. Who would fault them for going out to market to issue a little more stock, even though they're not doing that? Again, when your stock is up that much, that's sort of the whole point of being a public company is, you get to use that liquidity to then build your capital base. But certainly a stock that we'll be following.
BRIAN SOZZI: One thing to remind investors here and viewers, guys, is that this is what could happen in the months ahead with a lot of these SPACs. These stocks have gone through the roof. You want to be, and to your point, Myles, you might see a lot more, you might see secondary offerings as these companies try to raise even more capital to achieve their goals. And considering they don't have revenues, they don't have profits for a couple of years, you could see large swings in these stocks in the months ahead.
MYLES UDLAND: Look, the textbook will tell you that you should expect to see that. That's what any sensible company would do when they see their stock appreciate that much.