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Polestar (PSNY) stock launches on Nasdaq after SPAC merger

Polestar (PSNY) stock launches on Nasdaq after SPAC merger
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Shares of Polestar It went public under the code “PSNY” on Friday, making it the latest electric vehicle manufacturer to go public through a special-purpose buyout or merger with SPAC.

Shares of Polestar began trading on the Nasdaq one day after completing its merger with SPAC Gores Guggenheim. Shares of the EV manufacturer began trading at $12.98 on Friday, up 15.5% from SPAC’s final closing price on Thursday.

Polestar CEO Thomas Ingenlath said the company will use the approximately $850 million from the deal to fund its three-year plan to build new vehicles and eventually become profitable.

However, Ingenlath is part of Polestar, which started as a joint venture between Swedish Volvo Cars and Chinese auto giant Geely in 2017. went beyond the initial state.

“We’re going public as a working and successful business — not to raise capital to start a business,” Ingenlath told CNBC in a recent interview. “As the next three years will be super-fast growth, the company is ready for it with its product portfolio.”

SPAC deals have become a more popular way for companies to go public in recent years. Required disclosures are simpler than in a traditional IPO. Unlike a traditional IPO, companies participating in a SPAC merger are allowed to present forward-looking projections to investors that can help justify a high valuation. However, there is no guarantee that these predictions will come true.

So far, most SPAC mergers with electric vehicle companies have not done well for investors. Even relatively successful cases Lucid Group, fisherman and Nicholas It is currently trading 67%, 69% and 92% below its post-merger highs, respectively. EV truck manufacturer RivianGoing public through a traditional IPO, it also struggled. Its shares fell 84% from their post-IPO high.

However, Polestar may have several advantages over its competitors. Volvo Cars still owns 48% of the company and Polestar already has more than 55,000 vehicles on the roads in China, Europe and the USA. South Carolina plant shared with Volvo.

Over the next three years, the company plans to add three vehicles to its current model, the compact Polestar 2 crossover made in China. Additions include the Polestar 3, a large SUV; a medium-sized crossover, the Polestar 4; and the Polestar 5, a large sedan intended to serve as the brand’s flagship.

It will be all-electric and will be offered entirely in the US, Europe and China. Polestar plans to manufacture its vehicles in all three regions. By the end of 2025, Ingenlath expects Polestar’s three-year roadmap to lead the company to annual sales of approximately 290,000 vehicles.

Ingenlath said Polestar may need to raise more cash before it can become profitable – a milestone it expects to reach before 2025. If so, he said, the company would issue bonds rather than sell more stock.

So far, Ingenlath said the company’s plan is on track. Since the beginning of the year, it has received more than 32,000 orders for the Polestar 2 from 25 different countries. Polestar has also received orders from rental car giant Hertz. 65,000 vehicles in the next five yearsIngenlath said it primarily aims to give consumers the opportunity to try out the company’s EVs.

Polestar’s plan is to operate its sales and service networks in 30 countries by the end of next year, but Ingenlath said the company will likely reach that milestone sooner.

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