Please ensure Javascript is enabled for purposes of website accessibility

Electric Vehicle Battery Hopeful QuantumScape Dives After Hours on News of Stock Flotation

By Eric Volkman - Mar 22, 2021 at 8:39PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The company is issuing 13 million new shares.

QuantumScape (QS -4.13%) wasn't exactly an electric stock in after-hours trading Monday, following the post-market disclosure that it is floating a fresh stock issue. The maker of batteries for electric vehicles (EVs) will issue 13 million shares of its Class A common stock. It will also grant the flotation's underwriters, led by Goldman Sachs and Morgan Stanley, a 30-day option to buy up to an additional, collective 1.95 million shares.

QuantumScape said it will utilize its share of the resulting proceeds "to build a larger QS-0 pre-pilot line than recently announced; to cover its full share of equity contributions to its joint venture with [Volkswagen] for the previously disclosed 20GWh expansion of QS-1 joint manufacturing facility; and for working capital and general corporate purposes."

An electric vehicle being charged.

Image source: Getty Images.

Last month, the company announced its plans for a new pilot production factory where it would make the QS solid-state vehicle batteries. QuantumScape aims to produce and sell such products, which promise more power and safety -- and quicker recharging times -- than current models used in electric vehicles (EVs). The company does not yet have a battery on the market.

QuantumScape has benefited from a strategic investment by Volkswagen, which recently stated that it aims to become the No. 1 EV maker in the world in the very near future.

QuantumScape's new stock issue isn't painfully dilutive -- according to Yahoo! Finance, the company has just over 210 million shares outstanding at the moment. Yet it's a stark illustration that, as a pre-revenue business involved in a potentially capital-intensive activity, it could remain very hungry for funding.

That's likely what is driving the stock southward in after-hours trading. It was trading down 7% in the early evening hours.


Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

QuantumScape Corporation Stock Quote
QuantumScape Corporation
$11.60 (-4.13%) $0.50
Volkswagen Aktiengesellschaft Stock Quote
Volkswagen Aktiengesellschaft
$20.14 (2.89%) $0.56

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
S&P 500 Returns

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/23/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.