Illustration by Elias Stein
Text size
QuantumScapein
the incredible increase continued last week, as a gift from a Santa Claus from the market. Electric vehicle battery maker shares closed at $ 131.67, up 39% after a 29% rise on Monday. The shares gained almost 70% in one week and 390% since going public in late November.
On Tuesday, Quantum’s shares were worth $ 59 billion, based on 448 million fully diluted pro forma shares in circulation. The company overtook rivals, including
LG Chem,
Samsung SDI,
and
Panasonic,
market value. One exception: China
Contemporary Amperex Technology,
that was worth about $ 110 billion. But Quantum was also higher in market value than
Ford Motor
and
General Motors,
each automotive component of the Russell 3000, except
Tesla,
and two of the largest auto parts companies in the world, the Japanese
Dense
and Germany
Continental.
Shares fell at the end of the week to a market capitalization of $ 51 billion.
QuantumScape went public through a merger with a special purpose acquisition company, or SPAC, Kensington Capital Acquisition. GMO’s Jeremy Grantham invested $ 12.5 million in QuantumScape seven years ago through its foundation, a 4.8 million stake that is now worth $ 551 million. (GMO confirmed that it still owns all the shares.) Grantham doesn’t like SPACs, he told the Financial Times, but the participation “accidentally” has become the biggest investment he has ever made.
What is really driving the actions? Interestingly, there are not many shares to borrow, which suggests a tightening in the quote. And EVs and batteries are hot now. Tesla continues to rise, and Reuters reported that
Apple
plans to enter the EV market in 2024, with its own battery technology, which can compete with Quantum. Or maybe it’s just Santa Claus.
Next week
Monday, 12/28
The Federal Reserve Bank of Dallas releases its December Texas Manufacturing Outlook Survey. The consensus estimate is 11 readings, similar to November. The index rebounded sharply from a record low set in April and is at its highest level since the end of 2018.
Tuesday 29/12
S&P
CoreLogic
releases its National Case-Shiller Property Price Index for October. Economists predict an increase of 7% year on year, matching the September data. This number is the highest for the index since May 2014, as the housing market remains a high point for the economy.
Wednesday 12/30
Supply Management Institute launches its Chicago Purchasing Managers’ Index for December. Expectations are for a reading of 56.8, down from 58.2 in November.
Tiffany holds a special general shareholders’ meeting to vote on a proposed merger with
LVMH Moët Hennessy Louis Vuitton.
LVMH initially agreed to buy Tiffany in a cash transaction for $ 135 a share, 13 months ago, in a deal valued at $ 16 billion. Partly due to outages caused by the pandemic, the price was renegotiated to $ 131.50 per share in October, saving $ 430 million for LVMH.
The national association of Realtors launches its Pending Home Sales Index for November. Expectations are for a flat reading, month after month. The index fell 1% in September and October, after registering strong gains in the summer. The index is currently just below its historical peak established in early August.
Devon Energy
and
WPX Energy
hold special shareholders’ meetings to seek approval of its proposal to merge all shares of equals, first announced at the end of September. Under the terms of the agreement, Devon shareholders would own about 57% of the combined entity, which would have a corporate value of approximately $ 16 billion.
The Census Bureau reports the November international trade balance of goods. It is expected to run a deficit of around $ 80 billion, similar to that of the past four months. The trade deficit in goods reached a monthly record of US $ 83.9 billion in August.
The Mortgage Bankers The Association releases its Composite Market Index, which tracks mortgage loan applications, for the week ending December 25. The index is up sharply year on year, as the 30-year fixed rate is one percentage point below the previous year, at 2.86% recently.
Thursday 31/12
Fixed income markets close early at 2pm EST for New Year’s Eve. However, the New York Stock Exchange and Nasdaq maintain normal trading hours.
The Department of Labor reports initial claims for unemployment benefits for the week ending December 26. Claims for unemployment benefits increased in December by an average of 852,000 per week, as Covid-19 cases increased in parts of the country. As of December, claims have fallen every month since April, averaging 740,500 a week in November, below the April peak of more than five million a week.
Friday 1/1
Stock and bond markets are closed in keeping with New Year’s Day.
Write to Al Root at [email protected]