Illustration by Elias Stein
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QuantumScape‘s
astonishing rise continued over the past week, like a gift from a Santa on the market. Shares of the electric vehicle battery manufacturer closed at $ 131.67, up a further 39% from a 29% rise on Monday. The stock has gained almost 70% in a week and 390% since the IPO in late November.
On Tuesday, Quantum’s stock was worth $ 59 billion, based on its fully diluted 448 million pro forma shares outstanding. The company bypassed rivals, including
LG chem,
Samsung SDI,
and
Panasonic,
in market value. An exception: that of China
Contemporary Amperex technology,
that was worth about $ 110 billion. But Quantum was also greater in market value than
Ford Motor
and
General engines,
any auto part of the Russell 3000 except
Tesla,
and two of the largest auto parts companies in the world, Japan
Denso
and Germany
Continental.
Shares fell to a market cap of $ 51 billion later in the week.
QuantumScape went public in a merger with a specialty acquisition company, or SPAC, Kensington Capital Acquisition. GMO’s Jeremy Grantham invested $ 12.5 million in QuantumScape seven years ago through his foundation, a 4.8 million share that is now worth $ 551 million. (GMO confirmed he still owns all the stock.) Grantham doesn’t like SPACs, he told the Financial Times, but the bet turned “accidentally” into the biggest investment he’s ever made.
What really drives the stock? Anecdotally, there isn’t much stock to borrow, suggesting a short squeeze. And electric vehicles and batteries are hot right now. Tesla continues to rise, and so reported Reuters
Apple
plans to enter the EV market by 2024, with its own battery technology, which could compete with Quantum’s. Or maybe it’s just Santa.
Next week
Monday 28/12
The Federal Reserve Bank of Dallas is publishing its Texas Manufacturing Outlook Survey for December. The consensus estimate is for an 11 reading, similar to the November figure. The index rebounded sharply from a low in April and has been at its highest level since late 2018.
Tuesday 29/12
S&P
CoreLogic
releases its Case-Shiller US National Home Price Index for October. Economists forecast a 7% year-on-year increase, in line with September data. That figure is the highest for the index since May 2014, as the housing market remains a bright spot for the economy.
Wednesday 12/30
The Institute of Supply Management publishes the Chicago Purchasing Manager Index for December. It is expected for a reading of 56.8, down from November’s 58.2.
Tiffany is holding a virtual special shareholders’ meeting to vote on a proposed merger
LVMH Moët Hennessy Louis Vuitton.
LVMH initially agreed to buy Tiffany 13 months ago in a cash transaction for $ 135 a share, in a deal worth $ 16 billion. Partly due to pandemic shutdowns, the price was renegotiated to $ 131.50 per share in October, saving LVMH $ 430 million.
The National Association of Realtors publishes the Pending Home Sales Index for November. The expectations are for a flat reading month after month. The index fell 1% in September and October after strong gains in the summer. The index is currently just below its all-time high in August.
Devon Energy
and
WPX Energy
hold special shareholder meetings to seek approval for their proposed equity merger, which was first announced in late September. Under the terms of the deal, Devon shareholders would own approximately 57% of the combined entity, which would have an enterprise value of approximately $ 16 billion.
The Census Bureau reports the international trade balance in goods for November. It is expected to reach a deficit of about $ 80 billion, similar to the past four months. The trade deficit in goods hit a record high of $ 83.9 billion per month in August.
The mortgage bankers Association publishes its Market Composite Index, which tracks the number of mortgage loan applications, for the week ending December 25. The index is rising sharply year on year as the 30-year fixed rate is a full percentage point lower than a year ago, at a recent 2.86%.
Thursday 31/12
Fixed income markets closes early at 2pm EST for New Years Eve. However, the New York Stock Exchange and Nasdaq keep regular trading hours.
The Ministry of Labor reports initial jobless claims for the week ending December 26. Unemployment claims rose in December, averaging 852,000 a week as Covid-19 cases have increased in parts of the country. Until December, claims had fallen every month since April, averaging 740,500 a week in November, compared to the April peak of more than five million a week.
Friday 1/1
Stock and bond markets are closed with due observance of New Years Day.
Write to Al Root at [email protected]