QuantumScape has issued a share offering to pay for an expanded pilot production line for its solid-state batteries just months after it became a publicly traded company via a reverse merger.
QuantumScape said in a regulatory filing that the net proceeds from its sale of 13 million shares — along with an additional 1.95 million shares if underwriters exercise that option — could be much as $859 million based upon an assumed public offering price of $59.34 per share. The offering is expected to be priced after the market closes Wednesday, Bloomberg reported. The funds will be used to build a larger pre-pilot line called QS-0 and cover its part of a joint venture with Volkswagen Group for an expanded manufacturing facility known as QS-1.
Investors haven’t responded well in the hours following the initial offering, with prices falling more than 13% since launching the share offering. The market’s response is likely tied to the surprising timing of this share offering. Just six months ago, QuantumScape agreed to merge with a special purpose acquisition company (Kensington Capital Acquisition Corp.). At the time, QuantumScape said it was able to raise more than $700 million through the business combination, a figure that includes $500 million in private investment in public equity, or PIPE. The raise was anchored by institutional investors, including Fidelity Management & Research Company and Janus Transaction.