Tech

QuantumScape drops 12% after short-seller report calls it a ‘pump-and-dump SPAC scam by Silicon Valley celebrities’ and compares it to disgraced startup Theranos

  • QuantumScape fell as much as 12% on Thursday after short-seller Scorpion Capital compared the company to Theranos and called it a “pump and dump SPAC scam by silicon valley celebrities.”
  • The report is based on interviews with former QuantumScape employees and alleges that many of the battery startups claims are false.
  • “Our research indicates that QuantumScape can’t even reliably make test cells that work,” the short report said. 
  • Sign up here for our daily newsletter, 10 Things Before the Opening Bell.

QuantumScape fell as much as 12% on Thursday after the battery startup was the subject of a scathing short-report from Scorpion Capital.

The report, titled “A pump and dump

SPAC
scam by silicon valley celebrities, that makes Theranos look like amateurs,” say that QuantumScape’s technical claims on its highly guarded battery technology are misleading, exaggerated, or fraudulent.

The report is based off of interviews with former QuantumScape employees, as well as battery experts and current Volkswagen employees that are focused on the auto company’s electric vehicle battery efforts.

QuantumScape is working to make a scalable solid-state battery that would promise quicker charging times, longer range, and lower costs for electric vehicles, relative to today’s lithium-ion batteries.

The company has partnered with Volkswagen, which has invested $300 million in QuantumScape over the past few years, but Scorpion Capital is skeptical that the battery startup can deliver on its promises. 

“Our research indicates that QuantumScape can’t even reliably make test cells that work,” the report said, adding that “red flags around scaling and manufacturability render QuantumScape’s cells a pipe dream.”

Volkswagen and QuantumScape are targeting a production start of 2025 for the solid-state batteries. But Scorpion Capital doesn’t think that goal will be met. The short-seller believes Volkswagen is an unwitting partner that lends credibility to QuantumScape, similar to how General Motors partnered with Nikola, or Walgreens and Safeway partnered with Theranos.

“A key feature of the largest frauds is often the backing of a famous investor or corporate partner, in this case VW – ‘the smart money’ – that lends credibility to the scam,” Scorpion Capital said.  

Scorpion Capital is short shares of QuantumScape, meaning it stands to profit if the stock moves lower. 

quantumscappe.JPG



Markets Insider


Most Related Links :
honestcolumnist Governmental News Finance News

Source link

Back to top button