QuantumScape drops 13% after launching share offering to fund battery-pilot expansion

QuantumScape CEO Jagdeep Singh
CEO Jagdeep Singh QuantumScape
  • QuantumScape fells as much as 13% on Tuesday after it launched a 13 million-share offering on Monday evening.
  • The battery-technology company will use the proceeds raised from the offering to expand its battery production.
  • QuantumScape could raise about $US900 ($1,173) million from the share offering at current prices.
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Shares of QuantumScape fell as much as 13% on Tuesday after it launched a 13 million-share offering to fund the expansion of its next generation solid-state battery pilot line.

The offering could sell a total of 14.95 million shares if underwriters exercise a 30-day option to buy an additional 1.95 million shares. At current prices of about $US60 ($78), the offering could raise up to $US900 ($1,173) million in proceeds for the firm. The offering has not yet been priced.

Proceeds from the offerings will also cover its full share of equity contributions to its joint venture with Volkswagen for the previously announced 20GWh expansion of its QS-1 joint manufacturing facility. QuantumScape has partnered with Volkswagen to provide next generation, more efficient batteries for use in the production of electric vehicles.

The share offering by QuantumScape highlights the likely supply of stock that is set to hit the market from recent SPAC mergers that don’t forecast significant revenue or profits until at least 2025.

But the demand for share offerings from investors focused on long-term growth could be there for recent SPACs that need to rely on share offerings to fund its business until they turn profitable.

Over the past year, there have been more than 500 SPACs that have raised upwards of $US125 ($163) billion, giving them more than $US1 ($1) trillion in purchasing power, according to Dealogic.

Goldman Sachs and Morgan Stanley are leading the secondary offering.