What happened
Shares QuantumScape (QS -6.93%), a maker of solid-state batteries for electric vehicles (EVs), are down more than 55% so far this year, but have staged a bit of a rebound this week. As of Friday morning trading, the stock had jumped more than 14% this week, according to data provided by S&P Global Market Intelligence.
So what
The stock still hovers near its all-time low, however, and existing shareholders don't have any meaningful news from the business to attribute to this week's move. The jump comes as the number of shares sold short on QuantumScape has been dramatically increasing. As of mid-June, that number had jumped by more than 50% this year, with about 12.5% of total outstanding shares sold short.
QS percent of shares outstanding sold short. Data by YCharts.
In some cases, retail investors have latched on to stocks with high short interest to attempt to drive the share price up and force short-sellers to cover their positions in a short squeeze. That could partly explain this week's move.
Now what
As far as its business goes, QuantumScape is on track toward commercialization of its solid-state battery technology. But that remains more than a year away, as the company hopes to just begin producing samples on a pre-pilot production line in 2023.
If successful, the battery should improve existing EV battery performance with a more-efficient and safer battery that could provide longer range and a longer life than current lithium-ion batteries.
With such a massive potential market for EV adoption, some investors are speculating on shares of QuantumScape. That speculation, along with the potential retail investor interest, seems to have driven the shares higher this week.
