QuantumScape Stock Offering: What Investors Need To Know

Quantumscape Corp QS is tapping the equity market, barely seven months after public listing through the SPAC route. The company manufactures solid-state lithium-metal batteries for electric vehicles.

What Happened: San Jose, California-based QuantumScape announced Tuesday it has commenced an underwritten public offering of 13 million shares of Class A common stock.

The company has also earmarked 1.95 million shares to cover overallotments, if any.

Although the company is yet to announce the pricing for the offering, at Monday's closing price of $64.29, gross proceeds from the offering will likely be between $835.77 million and $961.14 million, depending on whether the overallotment option is exercised or not.

Related Link: Why Morgan Stanley Is Bullish on QuantumScape, Fisker, Bearish On Lordstown, Romeo Power

Why It's Important: QuantamScape said it intends to use the net proceeds from the offering to build a larger QS-0 pre-pilot line than recently announced. Part of the proceeds will also go toward covering the company's full share of equity contributions to its joint venture with Volkswagen AG VWAGY, and for working capital and general corporate purposes.

Related Link: Jon Najarian Sees Unusual Option Activity In Box And QuantumScape

QuantumScape announced in mid-February it has achieved a breakthrough in battery technology and plans to build a 200,000 square foot pilot line in California, dubbed QS-10, to make prototype batteries for the German automaker and other potential customers.

QS Price Action: QuantumScape shares were down 12.25% to $56.38 Tuesday morning. 

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(Photo: QuantumScape)