My take after reading the SEC filing detailing the transaction and reviewing the technology QuantumScape has developed, and when the revenue stream starts is to wait until after the merger (if you want to apply traditional logic ;)), unless you want to assume the risk that like many new market listings, retail investors will flock to the shares, and bid them into the stratosphere....
The potential number of shares outstanding and issued when warrants are added is approximately 369 million. They are suggesting and implied initial MC of 3.3 billion so they value the shares at something south of $10 post merger assuming all the shares are issued. Institutional and private placement investors will be able to acquire shares at $10 under certain conditions.
Bottom line for me; is $18 too high a premium? It's highly unlikely they will have meaningful revenue for 3+ years as they finish development build manufacturing capacity. On the positive side is the VW deal and their technology which does appear to be cutting edge. Of course it's impossible to say what other battery companies are working on, so their advantage may or may not last. The merger is supposed to happen sometime next quarter after shareholders meet and vote. No doubt KCAC will bounce about until then. I don't believe an entry point of $18 is good or bad, it really depends on what we believe will happen after the merger. Assuming a dud, the floor should be around $10. If the giddy market applies the same logic (Snowflake/Tesla..etc.) to the new QS ticker....I guess $18 looks cheap. No doubt we'll be hearing a lot about batteries over the next 2 or 3 years.
I'll probably buy 100 share lots and watch how the hype plays out. I'm inclined to believe the market hype will probably support a higher price then $18 post merger at which point I'd evealuate whether to sell based on the state of investor sentiment...
That's my take FWIW
PS...if by some small chance the merger is voted down the stock would tank.
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