Polestar Automotive Holding UK PLC (NASDAQ: PSNY) is back in the spotlight on Monday, December 22, 2025, as investors react to a fresh liquidity package anchored by its majority owner Geely—plus new bank money and a debt-to-equity conversion.
By midday in New York, PSNY stock traded around $14.18, up roughly 10.9% from the prior close after opening near $12.94 and swinging between $12.80 and $14.39.
Swedish newswire coverage also noted the stock popped at the open following the weekend’s financing headlines. [1]
What’s driving the move is not one announcement, but a sequence of balance-sheet and funding actions over the past week—plus a near-term “calendar” of catalysts that traders can actually point to.
The headline catalyst: $300M equity + $300M debt conversion (and why the structure matters)
Polestar disclosed a $300 million equity investment split evenly between Banco Bilbao Vizcaya Argentaria (BBVA) and Natixis—$150 million each. [2]
Key details investors are parsing:
- Pricing: The purchase price is $19.34 per Class A ADS, set at the 3‑month volume-weighted average price (VWAP) preceding the definitive agreement (rounded up). [3]
- Ownership cap: Polestar says no single institution in this deal will hold more than 10% of the company after closing. [4]
- No lock-up (as described): The release says the institutions will not face sale restrictions beyond normal securities-law limits. [5]
- Put options with Geely: Each institution also entered into a put option arrangement with a wholly owned Geely Sweden Holdings subsidiary, described as an “exit path” in three years with certain returns. [6]
- Expected timing: Polestar said the transactions were expected to close by Dec. 23, 2025, with no regulatory approvals required for the equity investment. [7]
That “put option” detail is the spicy bit. In plain English: this isn’t just “banks buying the stock because they’re bullish.” The banks appear to have downside protection or a defined exit mechanism tied to Geely. That can still be positive—because it brings cash in—but it also means common shareholders should be careful about reading the banks’ participation as a simple, unhedged vote of confidence.
Alongside the equity raise, Polestar also said Geely Sweden Holdings AB agreed to convert about $300 million of principal and interest owed under a prior facility into equity (subject to any needed regulatory approvals). [8]
Debt conversion can reduce leverage and interest burden, but it typically comes with one unavoidable tradeoff: dilution.
The other leg: up to $600M in a Geely-linked term loan (and why “subordinated” shows up everywhere)
A few days before the bank equity deal, Polestar announced a subordinated term loan facility of up to $600 million from a Geely Sweden Holdings affiliate. The key nuance: the first $300 million is committed, while the second $300 million is uncommitted and available only with lender consent. [9]
Reuters framed the move as part of Polestar’s effort to navigate a cash crunch amid broader EV demand softness, and noted the loan’s subordinated status (important for covenant math). [10]
Why investors care about the “subordinated” label: subordination can mean the loan doesn’t count the same way (or at all) against certain covenant limits—helpful for a company that has spent the year trying to stay compliant and keep funding channels open. [11]
Reverse split/ADS ratio change: the “PSNY stock price reset” that reshaped every chart and target
Before any of this funding news hit, Polestar executed a major capital structure adjustment: it changed the ratio of its American Depositary Shares (ADSs) so that 1 ADS now represents 30 ordinary shares, effective Dec. 9, 2025. [12]
Mechanically, ADS holders received one new ADS for every 30 existing ADSs, with automatic exchange for most holders via DRS/DTC systems. Fractional entitlements weren’t issued; instead, fractional pieces were sold and cash proceeds distributed. [13]
The tickers stayed the same:
- PSNY for Class A ADSs
- PSNYW for Class C‑1 ADSs [14]
The strategic reason, per widespread market coverage, was Nasdaq listing compliance after the share price spent extended time below $1 (a classic delisting-risk trigger). [15]
One practical consequence: after a 1-for-30 style adjustment, a lot of “headline” metrics can look surreal for a while—especially price targets, 52-week ranges, and percentage returns—depending on how quickly each data provider updates and normalizes split-adjusted history.
Fundamentals check: strong revenue growth, but profitability remains the monster under the bed
Polestar’s most recent detailed financial update (released in November for Q3 / first nine months) painted a two-sided picture:
Top-line momentum:
- Revenue:$2.171 billion for the first nine months of 2025, up 48.8% year over year [16]
- Retail sales (deliveries to end customers):44,482 cars, up 36.5% year over year [17]
- Cash balance:$995 million as of Sept. 30, 2025 [18]
- Carbon credits:$123 million for the first nine months (including amounts booked in other operating income) [19]
Profitability pressure:
- Net loss:$(1.558) billion for the first nine months of 2025 [20]
- Gross margin: deeply negative, heavily impacted by a non-cash impairment related to Polestar 3 (called out as $739 million in the company’s discussion). [21]
Reuters reporting earlier in 2025 also emphasized how tariffs and pricing pressure have contributed to widening losses and forced adjustments to strategy and supply chain choices. [22]
So the story the market is trading today looks like this:
- Yes, Polestar has shown meaningful revenue and delivery growth in 2025. [23]
- But it is still operating with heavy losses and sensitivity to tariffs, pricing, and residual value costs—meaning liquidity is destiny. [24]
Product momentum: Polestar 4 deliveries begin in North America (and pricing got more aggressive)
On the product side—where EV companies live or die—Polestar began delivering the Polestar 4 in the U.S. and Canada in mid-December, with early handovers highlighted in Florida. [25]
Industry coverage also pointed to a notable dynamic: a temporary price reduction in the U.S. market timed with the start of deliveries, likely aimed at jump-starting volume and improving competitiveness in a crowded segment. [26]
This matters for the stock because 2025 has been a year where Polestar’s narrative repeatedly snapped back to a single investor question:
Can the company translate new models and wider distribution into enough gross margin improvement to reduce its dependence on constant financing?
The market does not yet have that answer—so it’s reacting to the next best thing: funding runway.
Near-term forecasts and “what happens next” dates investors are watching
A big reason PSNY has been volatile is that Polestar’s story has turned into a rolling series of deadlines: covenant tests, funding events, model launches, and delivery updates.
Here are the near-term milestones that are now front and center:
- Dec. 23, 2025: Polestar said it expects the $300M equity investment to close by this date (equity side). [27]
- Debt conversion timing: The $300M Geely debt-to-equity conversion is expected after any needed regulatory approvals. [28]
- Jan. 9, 2026: Polestar said it expects to report Q4 2025 retail sales volumes on this date—an upcoming operational checkpoint. [29]
For longer-horizon context, Reuters reported earlier that Polestar’s updated business plan pushed the goal of achieving positive free cash flow after investments out to 2027 (later than earlier expectations). [30]
Analyst targets and market forecasts: why you’re seeing $30-ish targets (and why you should sanity-check them)
If you scan analyst target aggregations today, you’ll often see an average target price in the high-$20s to low-$30s per ADS.
Examples:
- A Nasdaq-hosted Fintel summary shows an average one-year target around $30.60, with a stated range roughly $30.30 to $31.50. [31]
- MarketWatch lists an average target of $30.00 and an average recommendation of Underweight (with a small number of ratings). [32]
- Zacks lists an average target around $29.04 based on three analysts. [33]
But there’s an important caveat that’s easy to miss if you’re speed-reading:
Because PSNY effectively went through a 1:30 ADS ratio change on Dec. 9, 2025, some “big” target-price jumps reported in December may be driven partly by mechanical split adjustments, not brand-new conviction calls. [34]
Adding to the noise, different data platforms sometimes disagree on consensus framing—TipRanks, for example, described Polestar as a Hold with no current price target shown in that specific write-up. [35]
The grown-up way to interpret this: treat the “$30 target” headlines as a directional reference, not a precise forecast, unless you can confirm:
- the target is post-split adjusted, and
- the rating/target was recently reaffirmed, not an older note floating forward in a database.
The bull case vs. the bear case as of Dec. 22, 2025
Today’s PSNY move is basically the market running a real-time debate.
What bulls point to
- Funding actions that could materially strengthen liquidity and reduce near-term bankruptcy/delisting anxiety. [36]
- Strong 2025 revenue and delivery growth (at least through Q3), plus an expanding lineup and retail footprint. [37]
- Continued willingness by Geely-linked entities to provide capital support. [38]
What bears keep circling
- Persistent losses, tariff and pricing pressure, and the fact that liquidity improvements often come with dilution (explicitly via equity issuance and debt conversion). [39]
- Complex structured financing (like put options) that may protect new investors more than existing common shareholders. [40]
- The reality that reverse splits/ratio changes can stabilize listing status but don’t fix unit economics by themselves. [41]
Bottom line for PSNY stock today
On Dec. 22, 2025, Polestar stock is trading like a company in the middle of a high-stakes transition: improving top-line momentum and product cadence, but still wrestling with margins and funding needs.
The market’s reaction makes sense: the latest funding package (equity + debt conversion + Geely-backed lending) directly targets Polestar’s most urgent investor concern—cash runway—and it does so just weeks after an ADS ratio change designed to protect its Nasdaq listing. [42]
From here, the next major “reality checks” are:
- whether the Dec. 23 closing timeline holds, [43]
- how much dilution is ultimately reflected in share counts post-conversion, [44]
- and what Q4 delivery volumes look like when Polestar reports them on Jan. 9, 2026. [45]
References
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