QuantumScape (NYSE:QS) is seeing QS stock nosedive on Monday following a couple bits of news concerning the fledgling battery company.
To start off with, the company filed an S-1 form with the U.S. Securities and Exchange Commission (SEC) on Friday. The SEC accepted that form today and the effective date on it was confirmed as Friday.
So why exactly does this matter to QS stock? That S-1 form frees up shares and warrants held by private placement investors. These are outstanding, which means that QuantumScape isn’t likely to receive funds from their sale. That would only occur if the warrants were exchanged for cash instead of a share of QS stock.
To go along with this news, QS stock is also seeing incredibly heavy trading this morning. As of this writing, more than 28 million shares of the stock have changed hands. That’s a massive upsurge compared to its daily average trading volume of 8.35 million shares.
It’s also worth pointing out that early news coverage on Monday hasn’t been kind to QS stock. A story published by Seeking Alpha this morning calls out the company for its unproven battery technology.
The author of the piece, Dr. Brian Morin, is the founder and CEO of Soteria Battery Innovation Group. This is a development and licensing company that has created a consortium to enhance lithium-ion battery creation. He claims that QuantumScape is overpromising and that there are several disadvantages it isn’t expecting when it comes to the development of its solid-state batteries.
QS stock was down 38.2% as of Monday morning.
On the date of publication, William White did not have (either directly or indirectly) any positions in the securities mentioned in this article.