KCAC:
The share price of a SPAC usually goes up substantially after the merger announcement. The merger between Kensington Capital and QuantumScape was announced on Sept. 3. The same day, KCAC shares opened at $19.32. The next day, they hit an all-time high of $25.75. Following some brief profit-taking, Kensington Capital stock now hovers at $19.
In 2018, a third of the SPACs were in the energy space. This year is seeing a shift to other industries, namely technology and alternative energy firms. The KCAC reverse merger highlights the growing importance of electric vehicles (EVs), alternative energy sources and battery technologies.
The most recent filing with the U.S. Securities and Exchange Commission says upon the closing of the merger, the combined company will adopt the QuantumScape name. Shares will continue to trade on the New York Stock Exchange under the symbol QS.
What to Expect From KCAC Stock in the Short Run
Going public is one of the most important strategic decisions taken by private companies. Following the completion of the merger, the fate of a given stock depends on a plethora of factors. In the past, not all reverse mergers with SPACs have been successful. Many such companies eventually go below $10. Yet there are others that become quite successful.
Recent quarters have seen several high-profile SPACs such as DraftKings (NASDAQ:DKNG), Nikola (NASDAQ:NKLA) and Virgin Galactic (NYSE:SPCE). In the days that followed the initial reverse merger news, all were higher than their opening prices.
However, they have all come off their all-time highs.
It is possibly too soon to tell how the price of Kensington Capital stock will ebb and flow in the coming months. Management and members of the board at Kensington Capital have decades of high-level experience both in the auto industry and investment management.
Similarly, C-Suite executives at lithium-metal battery maker QuantumScape have impressive resumes. As importantly, the company has the backing of Volkswagen (OTCMKTS:VWAGY), Continental (OTCMKTS:CTTAY), SAIC Motor, Qatar Investment Authority and Bill Gates. In fact Volkswagen has backed the company since 2012. QuantumScape centers around improving the range, charge time, life, safety and cost of lithium-metal batteries