QuantumScape CEO mulls legal action in response to activist short-seller’s critical report
QuantumScape could pursue legal action after coming under assault in a scathing report released by activist short-seller Scorpion Capital.
“We’re absolutely going to look at that,” Jagdeep Singh, chief executive of QuantumScape, said when CNBC’s Jim Cramer asked if the company would consider filing suit against the firm.
“Some of the points in there are just, just absurd. Absurd to the point where there are … things that we would want to take legal action on.”
Singh appeared on “Mad Money” Friday, one day after Scorpion published the short report. In the 188-page report, Scorpion accused QuantumScape – which became public in November through a blank-check merger – of operating as a “pump and dump SPAC.” It even compared the company to Theranos, the disgraced health tech startup.
QuantumScape shares dropped more than 12% after the information was released. The stock fell again on Friday, contributing to a 28% decline in less than two weeks.
“We don’t want to get too distracted either, but you know, we feel pretty good about where we are,” Singh said.
The battery company said it stands by the data it presented to investors and will continue to build a battery for its customers, such as Volkswagen, which recently invested another $ 100 million in the company.
QuantumScape argued that Scorpion was motivated to publish the report because it stands to benefit financially from the subsequent drop in share price. Investors who seek to turn a profit on a severe decline in a stock price are known as short-sellers.
“We’ve been always pretty transparent about what we have and the work that remains to be done,” Singh said. “That’s one of the things, frankly, that we pride ourselves on. We think we’ve been the most transparent of any solid-state battery company.”