What Happened?
Shares of quantum computing company IonQ (NYSE: IONQ) jumped 11.9% in the afternoon session after the company announced a significant advancement in quantum chemistry simulations that could accelerate the development of technologies aimed at decarbonization.
In collaboration with a major automotive manufacturer, IonQ demonstrated the ability to accurately compute forces at an atomic level using a specialized quantum algorithm. The results proved more accurate than those from classical computing methods. This breakthrough enabled the calculation of these forces at critical moments when molecular systems undergo significant changes. These calculations can be integrated into existing workflows to better trace chemical reaction pathways, which could help in designing more efficient carbon capture materials. The development broadened IonQ’s quantum chemistry portfolio, with potential uses across the pharmaceutical, battery, and chemical industries.
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What Is The Market Telling Us
IonQ’s shares are extremely volatile and have had 106 moves greater than 5% over the last year. But moves this big are rare even for IonQ and indicate this news significantly impacted the market’s perception of the business.
The previous big move we wrote about was 3 days ago when the stock dropped 2.7% on the news that the company announced the pricing of a substantial $2 billion equity offering.
The offering consisted of 16.5 million shares of common stock and pre-funded warrants to purchase approximately 5 million additional shares, each priced at $93. The deal also included seven-year warrants to purchase another 43 million shares at an exercise price of $155 per share. Even though the company noted the funds were for global expansion and commercialization, such a large issuance of new stock can worry investors. Creating a large number of new shares can reduce the value of existing shares, which often leads to a drop in the stock price.
Adding to the weakness, markets pulled back as worries over worsening trade relations with China were triggered by critical comments from President Donald Trump. Trump targeted China's tightening controls on rare earth metals, which are vital components in many technology products from electric vehicles to defense systems. The president's tone and the suggestion of canceling a meeting with President Xi caused a rapid sell-off in the market.
IonQ is up 84.9% since the beginning of the year, and at $79.70 per share, has set a new 52-week high. Investors who bought $1,000 worth of IonQ’s shares at the IPO in January 2021 would now be looking at an investment worth $7,378.
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