In the world of EV battery innovation, QuantumScape (NYSE:QS) is a stock investors have flocked to for growth, at least until late last year. Since hitting a peak of more than $130 per share in December, shares of QS stock have been on a relatively incredible decline.
This significant decline is a result of a variety of factors. Among these, the recent Scorpion Capital short report on QuantumScape has cast a ton of investor doubt in this solid-state battery producer. Questions of whether or not the company’s technological breakthroughs are real have plagued this stock in recent months.
This has resulted in quite the discount for growth investors.
Indeed, investors can pick up shares of QS stock for under $25, at the time of writing. Amid an 8% decline today, investors may be wondering — why the move on little in the way of news? After all, it’s a relatively green day for growth stocks.
Well, it appears the company’s undergoing a technical move today. Let’s dive into the cause of today’s price action in QS stock.
Lock-Up Expiration Bearish for Investors in QS Stock
A lock-up period is a window of time in which insiders are not allowed to divest their shares. Typically, early stage investors lock in their equity investment for a period to allow the company time to grow without the threat of insider selling. For companies issuing shares as compensation, employees may also be restricted from selling shares for a certain period of time.
According to the company’s S-1 filing, today marks the official end of the lock-up period for QS stock. Insiders looking to turn their sweat equity into cash appear to be doing so at a rapid clip. Indeed, the volume we’re seeing in QuantumScape today is roughly double the daily average, and there’s still time to go in the trading day.
Indeed, retail investors are spreading the news of this lockup expiration on social media platforms. We’ve seen similar moves with other high-profile stocks. Thus, today’s activity appears to have been somewhat anticipated by the market. Shares of QS stock have sold off in recent days.
How much longer the selloff in QS stock will continue remains to be seen. However, investors can be reasonably assured volatility is likely to continue for some time.
On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.