QuantumScape could take legal action after being assaulted in a screaming report issued by activist short seller Scorpion Capital.
“We’re definitely going to look into it,” QuantumScape CEO Jagdeep Singh said when CNBC’s Jim Cramer asked if the company would consider filing a lawsuit against the firm.
“Some of the points in it are just, just absurd. Absurd to the point where there are … things we want to take legal action on.”
Singh appeared on “Mad Money” on Friday, one day after Scorpion published the short report. In the 188-page report, Scorpion accuses QuantumScape – which became known in November through a merger with a blank check – of operating as a ‘pump-and-dump spacecraft’. It even compared the company to Theranos, the disgraced health business.
QuantumScape shares fell more than 12% after the information was released. The stock fell again on Friday, contributing to a 28% drop in less than two weeks.
“We do not want to be 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 has provided 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 benefited financially from the subsequent drop in the share price. Investors who want to make a profit with a serious drop in a share price are known as short sellers.
“We’ve always been pretty transparent about what we have and the work that still needs to be done,” Singh said. “It’s honestly one of the things we’re proud of. We think we were the most transparent of any solid state battery company.”