Been digging into QuantumScape's board connections and insider activity

There are a bunch of things I track when it comes to a company. Financials obviously, but also board members, specifically where a person sits on multiple boards and what their background is. That combined with insider buying/selling can give you hints about whats going on behind the scenes. QS caught my eye this week. So between Feb 18 and 20, basically every C suite exec at QuantumScape filed Form 4s. All sells. | Name | Title | Shares Sold | Approx Value | |------|-------|------------|-------| | Siva Sivaram | CEO | 283,806 | ~$2.0M | | Timothy Holme | CTO | 324,486 | ~$2.3M | | Kevin Hettrich | CFO | 117,259 | ~$836K | | Mohit Singh | Chief Dev Officer | 131,451 | ~$937K | | Luca Fasoli | COO | 87,476 | ~$625K | | Michael McCarthy | Chief Legal Officer | 76,688 | ~$547K | | JB Straubel | Director | 27,106 | ~$192K | Roughly $7.4M in insider selling in 3 days. Stock went from $7.15 to $6.85 during this. Now that last name is the interesting one. JB Straubel co founded Tesla. He was their CTO from 2005 to 2019, built their entire battery and powertrain architecture from scratch. Left to start Redwood Materials which is now the biggest lithium ion battery recycling company in the US. Here's the thing though. He sits on two boards. Tesla ($1.5T) and QuantumScape ($4.1B). For those who don't know, QuantumScape is developing solid state lithium metal batteries. This is basically the technology that would replace the liquid lithium ion cells that Tesla currently uses. Higher energy density, faster charging, doesn't catch fire. Its the holy grail of EV batteries. So the guy who built Tesla's battery tech from the ground up, who now runs a battery recycling company, is sitting on the board of both Tesla AND the company developing next gen batteries that could replace Tesla's current tech. And he's been consistently selling QS: Dec 19: Exercised options at $2.38, sold at $11.38, netted about $1.5M Jan 5: Sold 27,106 shares at $11.28, about $306K Feb 19: Sold 27,106 shares at $7.10, about $192K Three straight months, each time at a lower price. This is where it gets contradictory. The board connection is exactly the kind of pattern you see before strategic acquisitions. Tesla loves vertical integration, they bought Maxwell Technologies for $218M, Grohmann Engineering, SolarCity. If QS ever cracks commercialization Tesla acquiring them would make total sense and Straubel is literally the bridge between the two companies. But every insider is selling. All of them. If there was a deal being discussed insiders would be frozen because selling on material non public information is securities fraud. The fact that the CEO, CTO, and Straubel are all selling tells you no deal is happening right now. Some other stuff worth noting: QS reported Q4 on Feb 11 and the stock has dropped about 40% in three months ($11.83 to $6.85) Volkswagen/PowerCo is their main strategic partner. VW actually has a board representation agreement where they get to nominate directors based on how much stock they own QS burns about $275M a year in operating cash flow with zero revenue They still have $1.3B in total assets and about $141M in cash The options market is weirdly bullish though, put call ratio is only 0.34 and max pain is at $8.50 Honestly the selling itself isn't the interesting signal to me. The interesting signal will be when the selling stops. If Straubel's monthly sells suddenly go quiet or if any insider starts buying, thats when I will start to pay attention. Other things that might be worth watching: A 13D filing showing Tesla or another strategic buyer accumulating more than 5% QS announcing a "strategic review" or hiring an investment bank 10b5-1 plan cancellations where insiders kill their pre planned sells Unusual call activity at above market strikes Right now the data says doesn't indicate any setup for a deal, insiders clearly dont love the near term setup, but the structural pieces for something down the road are just sitting there on the board of directors. There are a couple of other interesting setups that are probably cleaner, might post them in coming days, if there is interest.