It is an understatement to say we are bullish on the Kensington Capital Acquisition Corp and QuantumScape Merger. Rarely do we get such an industry changing technology such as the one claimed in the QuantumScape investor report. We say this with a grain of salt, considering there is no final product on the market yet. However, given the information coming from the company, there are some very strong prospects. Especially considering its current list of partnerships and incredible board of directors. Below is why we’re buying every dip on the Kensington Capital Acquisition Corp and QuantumScape Merger.
What is QuantumScape?
QuantumScape claims to be the leader in developing of next generation solid-state lithium-metal batteries for use in electric vehicles. Below is the chart detailing the efficiency, or energy density, of the company’s batteries.
What are the benefits of their batteries? From QuantumScape’s website:
Essentially, the company’s claim to fame is an extremely dense solid state battery that can hold its charge well above any existing electric vehicle battery.
Low cost, high density, long shelf life, fast charge, etc. etc.
However, the product is incomplete (as far as we know).
So why are we, and many others, so bullish on a company that does not even have a viable product?
Merger News From the Horse’s Mouth
A few months ago, Kensington Capital Acquisition Corp and QuantumScape announced a merger through what is now commonly known as an SPAC. The Press Release reads:
- QuantumScape Corporation has entered into a definitive merger agreement with Kensington Capital Acquisition Corp. (NYSE: KCAC); upon closing, the combined company will remain listed on the New York Stock Exchange under the ticker symbol “QS”
- QuantumScape raises over $700 million in proceeds through the business combination, including a $500 million fully committed PIPE anchored by institutional investors including Fidelity Management & Research Company LLC and Janus Henderson Investors
- Transaction results in over $1 billion in cash and funding commitments, including QuantumScape’s Series F financing led by the Volkswagen Group and Qatar Investment Authority (QIA)
- QuantumScape and Volkswagen have previously announced a joint venture to enable industrial-level production of solid-state batteries for use in VW’s vehicles
- Pro forma implied enterprise value of the combined company is approximately $3.3 billion
This was great news at the time, at the height of the “EV Boom,” the massive rally of EV stocks following the March 2020 pandemic fueled crash.
KCAC stock pumped over 200% on the news. The warrants were up even more.
Since then, the stock has slowly melted down waiting for news of the merger.
Great news for KCAC bulls. The company recently issued a press release updating investors on the merger approval date.
WESTBURY, N.Y. and SAN JOSE, Calif., Nov. 12, 2020 /PRNewswire/ — Kensington Capital Acquisition Corp. (NYSE: KCAC) (“Kensington”) and QuantumScape Corporation (“QuantumScape”) today announced that the Special Meeting of Stockholders of Kensington (the “Special Meeting”) to approve the pending business combination between Kensington and QuantumScape is scheduled to be held on Wednesday, November 25, 2020, at 10:00 a.m., Eastern time. The Special Meeting will be completely virtual and conducted via live webcast. Holders of Kensington’s shares of Class A Common Stock and Class B Common Stock at the close of business on the record date of October 27, 2020 are entitled to notice of the virtual Special Meeting and to vote at the virtual Special Meeting. Following the proposed business combination, QuantumScape, a leader in the development of next generation solid-state lithium-metal batteries for use in electric vehicles, will be listed on the New York Stock Exchange under the new ticker symbol (“QS”).
The stock jumped about 35% on the news as investors rushed to digest the announcement.
Since the 35% jump, KCAC has melted back down to pre accouchement levels.
Do not fret bulls, we are getting close! November 25th is right around the corner.
So Why Are We So Bullish?
First of all, although the company does not have a market ready product, their battery design has been in development for a very long time.
Apparently since at least 2011.
This is when we know Kleiner Perkins and Khosla Ventures formed a strategic partnership with the company.
In fact, QuantumScape has a pretty significant list of investors.
Check out the Crunchbase company profile for a full list.
Lots of investors is very bullish, especially when they are big shots.
In 2012, Volkswagen announced a major investment into the company, apparently shining light on its impressive battery technology.
It did not stop there. Volkswagen has made at least 2 publicly known investments into the company since inception.
According to a 2018 Press Release:
The Volkswagen Group has concluded the planned increase in its stake in the California technology company QuantumScape. The Committee on Foreign Investment in the United States (CFIUS) had no objection to the transaction. Volkswagen is investing 100 million USD in the battery specialist, thus becoming its largest automotive shareholder. Volkswagen will now take a seat on the board of directors of QuantumScape. Furthermore, Volkswagen and QuantumScape have formed a joint venture to enable an industrial level of production of solid-state batteries.Volkswagen News Room
That covers the 2012 investment of $100 Million USD, the first of two.
The release also added:
- Volkswagen Group closes QuantumScape transaction and invests 100 million USD in the US-based leading technology company for solid-state batteries
- New joint venture with QuantumScape aims to enable an industrial level of production of solid-state batteries
2018 Volkswagen Investment
A more recent investment from Volkswagen was documented in 2018. The company decided to increase its stake in QuantumScape to accelerate the development of its batteries. The Press Release reads:
The Volkswagen Group is increasing its stake in QuantumScape and making an additional investment of up to US$200 million in the US battery specialist. The goal is to drive forward the joint development of solid-state battery technology. In future, solid-state batteries are expected to significantly increase range and shorten charging times further. “We are making technological progress with our partner QuantumScape. The additional investment will effectively strengthen and accelerate our joint development work”, said Thomas Schmall, Chairman of the Board of Management of Volkswagen Group Components, which has end-to-end responsibility for batteries. The Volkswagen Group and QuantumScape have also been collaborating in a joint venture to enable industrial-level production of solid-state batteries since 2018.
$200 Million USD….Bullish!
To save you a click, here is a list of all the cumulative investors:
The A Team
So they have a lot of investors, who cares?
Well, having a lot of big shot investors and partnerships is a pretty good sign in general.
But if you want to bet on a company with no market ready product, you are going to want to see who is on the team.
Where to begin? Well, here is a snapshot from the company website:
We have already discussed the incredible partnerships with Volskwagen, which could bring in billions of dollars in revenue if QuantumScape becomes the primary supplier of batteries.
BILLIONS AND BILLIONS.
The Avengers of EV Industry
Instead of going through each one, we will summarize how all star A-list corporate celebrity this corporate board is. Check out the employee profile page on CrunchBase if you would like to do more in depth research.
Needless to say, if you were to assemble the “Avengers” of a particular industry, it would be the QuantumScape team.
These titans include:
Jagdeep Singh, the Founder and CEO. Extremely intelligent, you can find one of his videos discussing the company here.
Oh…and he is listed as the Founder and CEO of Infinera.
Next we have the Tim Holme, the Founder & Chief Technology Officer.
Check out his recent comments on the future of electric vehicles.
Finally, we have Kevin Hettrich, the CFO.
Check out his LinkedIn profile.
The list goes on and on.
These are the top dogs of industry, mostly Ivy League educated with long experience in building and advising multiple big league companies.
We highly encourage everyone to research the team, it is a very important step in doing one’s due diligence before investing.
All star team, massive investments, incredible partnerships…is it any wonder why we are so bullish? Again, it is extremely rare to happen upon such an industry changing technology such as the one claimed in the QuantumScape investor report. Remember, we say this with a grain of salt, considering there is no final product on the market yet.
However, considering its current list of partnerships and incredible board of directors, major investors and product description…this may be a slam dunk.
For these reasons, we are buying EVERY dip on the Kensington Capital Acquisition Corp and QuantumScape Merger.
Oh…and Bill Gates is a big investor.
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