QuantumScape stock’s epic run continued Tuesday. Shares closed at $131.67, up another 39% after rallying 29% on Monday. The numbers are, to say the least, incredible.
Shares of the electric vehicle battery company have gained almost 80% this week and about 593% over the past three months. Both numbers aren’t really comparable to the returns of much else, including the S&P 500 and Dow Jones Industrial Average.
Figuring out what’s going on isn’t easy. Anecdotally, there isn’t a lot of stock to borrow. That means a short squeeze might be at play. Short sellers have to borrow stock to sell it short, betting on price declines. No shares to borrow can mean too many short sellers are already in the stock.
QuantumScape stock doesn’t appear to be heavily shorted, but it’ new and it’s possible short-selling data aren’t up to date. The merger that made Quantum a publicly traded player only closed in late November.
There is also increasing bullish sentiment regarding electric vehicles and battery technology. It’s hard, frankly, to justify an 80% two-day price rise though.
The most significant news today seemingly was from Apple (AAPL) and its potential plans to enter the EV market. Part of that story, however, was Apple’s own battery technology. That would be competition for Quantum products.
Whatever the reason, gains leave Quantum stock worth almost $59 billion based on the 448 million proforma shares outstanding after the company’s merger with a SPAC. QuantumScape wasn’t immediately available to get an updated share count.
That’s more than existing battery makers LG Chem (051910.Korea), Samsung SDI (006400.Korea), and Panasonic (6752.Japan). Contemporary Amperex Technology, or CATL, (300750.China) is valued at roughly $110 billion.
Quantum market capitalization now exceeds Ford Motor (F) and General Motors (GM). Quantum’s market cap is, in fact, larger than every auto component of the Russell 3000 Index, except Tesla (TSLA).
Quantum is also worth more than Japanese auto parts giant Denso (6902.Japan) and German auto parts giant Continental (CON.Germany).
The numbers and comparisons are breathtaking. Now if we only knew why.
Write to AL Root at allen.root@dowjones.com
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