QuantumScape Stock Is Jumping After Earnings. Why the Move Is Meaningless.

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July 28, 2021 11:32 americium ET

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Courtesy QuantumScape

Stock successful electrical conveyance battery technology institution QuantumScape is soaring aft the institution reported second-quarter earnings Tuesday evening. There was bully news, but isn’t a truly bully crushed for a double-digit jump. The banal is conscionable precise volatile.

The institution reported a 12 cent per stock loss, but net don’t substance each that much. There are nary sales. More important the archetypal 10-layer cells are being tested. QuantumScape is inactive a agelong mode from commercialized sales. The institution is pioneering solid-state, lithium anode batteries. Solid-state, successful this case, means nary liquid successful the batteries facilitating the question of electrons. QuantumScape’s exertion promises amended EV scope and information on with faster complaint times and little costs.

Still, Quantum (ticker: QS) banal is up 8.6% successful aboriginal trading astatine $23.25. Shares traded arsenic precocious $24.38, up 13.9%. The S&P 500 and Dow Jones Industrial Average, for comparison, are up 0.1% and flat, respectively.

A QuantumScape artillery looks similar a playing card. A large situation for the institution is to crook 1 paper into a platform of cards. That’s what volition beryllium required to physique automotive-grade cells. Down the road, galore decks volition signifier the ground for an EV artillery back.

“Our extremity was to person 10-layer cells by the extremity of 2021, truthful we are encouraged to person our archetypal 10-layer cells this early,” said CEO Jagdeep Singh connected the company’s net league call. The institution tested a 4-layer compartment successful February. “The improvement of 10-layer cells has been the effect of a fig of factual improvements to our separator manufacturing process.”

Faster improvement is simply a affirmative for the institution and the stock. Still, options markets implied a 16% move, up oregon down, aft earnings. Some of the Wednesday bounce is conscionable owed to the information QuantumScape shares are precise volatile.

The banal really dropped 7.4% aft reporting first-quarter earnings. That was the study wherever the institution reported investigating its 4-layer cell.

Since the institution is inactive years from commercialization, investors volition astir apt person to unrecorded with higher than mean volatility. QuantumScape banal is down much than 80% from its $132.73 52-week precocious and up much than 140% from its $9.74 52-week low.

Shares are down astir 72% twelvemonth to date.

Write to allen.root@dowjones.com

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