Posts

Showing posts with the label QuantumScape

QuantumScape’s bear market is in full swing

-
One of Warren Buffet's favorite quotes comes from the father of value investing, Benjamin Graham. It goes like this: in the short run, the market is like a voting machine but in the long run, the market is like a weighing machine. This means that in the short run, the market is tallying up which firms are popular and unpopular but in the long run, the market is assessing the substance of a company. Electric car-battery developer QuantumScape (QS) is a textbook example of the stock market behavior in the short term. One moment it was a market darling, and the next, it was completely out of favor. Lately the selling pressure on QS stock has been intense. So intense that the company has lost a whopping 60% of its value in the past two weeks. No, the company didn't declare bankruptcy and nothing equally devastating happened to it. In fact, nothing news worthy came out about the company, its technology or the market it's in.  As mentioned in a previous article , QS is not all hy...
Post a Comment
Read more

QuantumScape: The science is real. The valuation? Not so much.

-
One of the most unsettling developments in business in 2020 was the trend that having no revenues proved not to be a deterrent for electric vehicle (EV) companies to go public. Although, the practice is unheard of in the the automotive world, Nikola, Fisher and others have done it and achieved multi-billion dollar valuations. The latest rebel is QuantumScape (QS) - a battery start-up that became a public company in November after merging with a SPAC. Although, it won't generate revenues until 2026, its market cap exceeded $50B in the last week of December. When the SPAC deal was announced, the parties decided a $3.3B valuation was appropriate. Except for QS showcasing its lab results, nothing material has changed between the SPAC deal and the last week of December to prompt the astronomical rise in valuation. It would appear that the same speculative fever that has many investors chasing the next Tesla has taken hold of QS investors. But is QS all hype, like Nikola, whose own techn...
Post a Comment
Read more

Popular posts from this blog

Microsoft vs. Sony: The console battle and the gaming war

-
Last week, Sony launched PlayStation 5 (PS5) on the same day that Microsoft dropped its Xbox Series X and S. So much for not stealing each others' thunder ;) As far as the actual hardware specs go, they are pretty on-par with each other. However, the two warring companies are approaching the growing gaming industry very differently, and competition between them will be one of the most interesting stories to watch over the coming few years. Here's a run down of where the two companies are and the very different directions that they are taking: Sony Sony is following the traditional razor and blades model that has long characterized consoles: try and not lose too much money on the consoles, and make up the difference in game licenses, its online service, and in-game purchases. It’s a model that gamers are familiar with, even if it ends up being a pricey one. In short, Sony is treating the PS5 like a console, and gamers like gamers, just as they did last generation. So, when it la...
Read more

Why the stock market is beating expectations

-
Image
  In the early stages of the pandemic, the S&P 500 index dropped a third of its value. Since then it has roared back, soaring more than 50 percent from its low in late March and setting an all-time high last week. This seems very implausible when set against the current state of the economy and the ongoing devastation caused by the pandemic. So why is the stock market rallying in the face of a pandemic and bad economic news? Several explanations are plausible. The stock market is not the economy: The stock market represents publicly traded companies only; it’s not the whole market. Most importantly, it’s always forward looking; i.e. it’s an indicator of the future earnings of those companies and how they would fare in the future. A rising stock market indicates that investors think these companies will do better in the future. On the other hand, a falling stock indicates that investors are pessimistic about the future earnings of companies. Continued income support for the ec...
Read more

Airtags: The ultimate brand power move

-
Last week, Apple hosted its first event of the year and unveiled a slate of deliciously colorful products. But the star of the show was ... what we've been hearing rumors about for a very long time. Apple finally unveiled AirTags, little Bluetooth buttons you stick on things like wallets and keys to locate them (yep, just like Tile). They start at $29 each and will be available on April 30. AirTags use Apple's U1 chip — the same one used in iPhone 12. The chip will make AirTags trackers more accurate than those from Tile, Samsung, and Sony. Also AirTags use the "Find My" network, the same one used for Find My iPhone, Friends, etc. "Find My" is a crowdsourced network of hundreds of millions of Apple devices that can help users locate their missing tech through Bluetooth connection.  Bottom line: Apple’s powerful brand is a statement – that's currently limited to Apple devices. But with AirTags, people can slap expensive Apple labels on non-Apple products....
Read more