'A Pump and Dump SPAC Scam': Quantumscape (QS), Backed by Bill Gates and Volkswagen, Falls 10% On a Short Report from Scorpion Capital

April 15, 2021 9:38 AM EDT
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Price: $31.02 +0.13%

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    2 Buy, 2 Hold, 1 Sell

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A new short report from Scorpion Capital sent shares of Quantumscape (NYSE: QS) 10% lower in pre-open Thursday.

The company is no different than other recently exposed SPAC promotions and EV frauds, according to the activist short-selling Scorpion Capital, who interviewed 9 former R&D employees, 4 leading solid-state battery experts, and 2 employees in Volkswagen’s EV battery effort.

The activist alleges that many positive milestones that QS disclosed are false, including fast charging to 80% in less than 15 minutes. The report quotes a senior member of Volkswagen (VW) battery team, who says:

“The main issues our engineers and experts are raising are trust in the data, a lack of transparency. Behavior in certain situations like extreme temperatures and so on. This is a big question mark where they’re saying that we are having a lot of issues and a lot of risk. Those are [some of the] core questions that are circling around. They don’t trust that you can charge it in 15 minutes, for example.”

QS, which went public via a SPAC merger, claims that it has developed a breakthrough in the solid-state battery for electric vehicles.

“Ex-employees slammed each key claim as misleading, exaggerated, or fraudulent. Dendrites are one of the most stubborn obstacles to solid-state batteries. QS claims to have a “magic material” that’s solved it. Six ex-employees suggested the claim is false, made up, or “definitely bullshit,” implying that QS still struggles with dendrites: “hype,” “science is not there yet,” the report adds.

Two weeks ago, QS stock rallied after Volkswagen approved a second $100 million investment. The stock received another boost after Morgan Stanley praised the company, which is rated as “Overweight” with a price target of $70.00 per share.



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