What happened
Shares of QuantumScape (QS 3.18%) spiked 16% early Tuesday morning after a spectacular drop on Monday. As of 11 a.m. EST today, shares are up 7%.
So what
The stock of the future maker of solid-state batteries for electric vehicles (EVs) was on a tear in December, gaining 270% in the first three weeks of last month. Shares are down about 60% from that peak, mainly due to an almost 50% single-day drop Monday.
Image source: Getty Images.
Today's jump after the sell-off may also be related to a mention the company got on CNBC's Mad Money last night. Host Jim Cramer acknowledged the huge gains the stock had prior to its recent decline, and said, "I think the stock's worth buying into weakness." Cramer also warned viewers that there could be more declines, as the company's battery technology is not yet in production.
Now what
QuantumScape released a presentation on its solid-state battery technology on Dec. 8, 2020, that excited investors. The solid-state technology charges to 80% capacity in just 15 minutes, has greater than a 300-mile range, has a long usage life, and is non-combustible.
But QuantumScape is several years from commercial production, and its current market capitalization is still over $18 billion. Investors who want to speculate on the potential of QuantumScape and its business need to plan on a lot of volatility in the years leading up to its technology going to market.
