January 06, 2021 - An investor in shares of QuantumScape Corporation (NYSE: QS) filed a lawsuit in the U.S. District Court for the Northern District of California over alleged violations of Federal Securities Laws by QuantumScape Corporation in connection with certain allegedly false and misleading statements made between November 27, 2020 and December 31, 2020.
San Jose, CA based QuantumScape Corporation develops and commercializes solid-state lithium-metal batteries for electric vehicles.
On January 4, 2021, prior to open of trading, an article was published pointing to several risks with QuantumScape’s solid state batteries that make it “completely unacceptable for real world field electric vehicles.” Specifically, it stated that the battery’s power means it “will only last for 260 cycles or about 75,000 miles of aggressive driving.” As solid state batteries are temperature sensitive, “the power and cycle tests at 30 and 45 degrees above would have been significantly worse if run even a few degrees lower.”
Shares of QuantumScape Corporation (NYSE: QS) declined from $132.73 per share on December 22, 2020 to as low as $47.20 per share on January 5, 2021.
According to the complaint the plaintiff alleges on behalf of purchasers of QuantumScape Corporation (NYSE: QS) common shares between November 27, 2020 and December 31, 2020, that the defendants violated Federal Securities Laws. More specifically, the plaintiff claims that between November 27, 2020 and December 31, 2020, the defendants failed to disclose that the Company’s battery technology was not sufficient for electric vehicle performance, as it would not be able to withstand the aggressive automotive environment; the Company’s battery technology likely provided no meaningful improvement over existing battery technology, that the successful commercialization of the Company’s battery technology was subject to much more significant risks and uncertainties than defendants had disclosed, that as a result of this information being withheld from the market, QuantumScape securities traded at artificially inflated prices between November 27, 2020 and December 31, 2020, with the Company’s Class A common stock reaching a high of more than $131 per share, and that the Company was able to complete a combination with Kensington Capital Acquisition Corp. and to commence an underwritten secondary public stock offering of its publicly traded securities “at market price,” registering for resale more than 300 million shares of QuantumScape publicly traded securities by insiders beginning on December 31, 2020, including several QuantumScape senior executives and its controlling shareholder.