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These Are the Plunging Charts that the New York Stock Exchange Hopes You Won’t See

Courtesy of Pam Martens

The New York Stock Exchange (NYSE) has had its share of scandals. There was the late 1930s when former NYSE President Richard Whitney went to prison for embezzlement.  In 2004 New York State Attorney General Elliot Spitzer took the NYSE and its former Chairman and CEO, Richard Grasso, to court over charges of violating New York State non-profit law by giving an obscene $187.5 million pay package to Grasso. In 2014 bestselling author Michael Lewis went on 60 Minutes to report that “the United States stock market, the most iconic market in global capitalism, is rigged” after writing a very convincing book, “Flash Boys,” explaining exactly how it was rigged. (We could go on and on but you get the point.)

We want to go on the record, here and now, that the past scandals of the New York Stock Exchange are going to look like minor hiccups when the history of the current New York Stock Exchange era is written. The listing standards for companies that the New York Stock Exchange allows to trade under its imprimatur is the worst in its history.

Let’s start with the case of QuantumScape, which trades on the New York Stock Exchange under the ticker, QS. On April 15, the hedge fund Scorpion Capital, which has a short position in shares of QuantumScape and stands to profit from its decline, released a breathtaking 188-page report in which it called the company a “fraud,” a “scam,” an “impending pump and dump,” and wrote that it “Makes Theranos Look Like Amateurs.” (Theranos claimed it had created a technology that would revolutionize the blood-testing industry. It was eventually exposed as a fraud. But Theranos was not a publicly-traded company listed on the New York Stock Exchange, enticing potentially thousands of average moms and pops to invest in its shares. It was a private company wooing well-heeled investors.)

QuantumScape is a battery developer for electric vehicles. It began trading on the New York Stock Exchange on November 27, 2020. At the time, it had no commercial product and zero revenues.

The report from Scorpion Capital sums up its analysis of the company like this:

“The company claims to have a ‘magic material’ that’s led to a breakthrough solid-state battery for electric vehicles. Even amidst the current mania of retail gambling on vaporous SPAC promotions, QS stands out for its reckless, nosebleed valuation of $15B – or roughly ~ $80MM per employee, a mere 188 per LinkedIn. QuantumScape, across its investor materials, has only released about 7 key ‘data’ slides with a few scraps of information. This leads us to pen a new valuation metric – ‘Market Cap per Powerpoint Slide’ – in this case, about $2B for each tantalizing crumb.”


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Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

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