Short Report 'Just Hearsay,' Buy QuantumScape (QS) on Weakness - Analyst

April 16, 2021 8:11 AM EDT
Get Alerts QS Hot Sheet
Price: $26.55 -2.75%

Rating Summary:
    2 Buy, 2 Hold, 1 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 26 | Down: 9 | New: 37
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Market analyst Trip Chowdry, of Global Equities Research, says investors should ignore the Scorpion Capital short report and use the pullback in QuantumScape (NYSE: QS) to buy the stock.

The report is "just hearsay" as the challenges faced by the company are similar to those faced by Semiconductor Industry when it was trying to move from Discrete Transistors to Planar Technology.

"Jack Kirby and Bob Noyce figured out how to create Transistors in a Planar form that eventually led to massive scaling," the analyst wrote in a note.

Hence, challenges faced by QS are "not insurmountable," Chowdry argues. Investors should therefore ignore the noise and buy on weakness.

He further adds that QS has “solid” Battery Technology, which translates into a solid market opportunity with Volkswagen (VOW) and others. The analyst projects QS revenues to hit $45 billion by 2030.

A short report from Scorpion Capital sent shares of Quantumscape more than 12% lower yesterday. QS is no different than other recently exposed SPAC promotions and EV frauds, a report from the activist hedge fund notes.

“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,” a senior member of the Volkswagen (VW) battery team was quoted in the report.

QS stock is up over 1% in pre-open Friday.

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