Polestar Automotive Holding UK PLC (Nasdaq: PSNY) is back in the market spotlight on December 24, 2025, with the stock rallying sharply as investors digest a string of balance-sheet moves designed to extend liquidity, reduce leverage, and keep the company’s Nasdaq listing in good standing. [1]
The quick version: PSNY traded around $17.09, up roughly 13% on the day, after Polestar announced $300 million in new equity, a plan for ~$300 million of debt to convert into equity, and a Geely-backed term loan facility of up to $600 million. Those are big numbers for a company that has been fighting (1) EV pricing pressure, (2) tariffs, (3) weak margins, and (4) ongoing cash-burn concerns. [2]
Polestar stock price today: Why PSNY is moving on December 24, 2025
Polestar shares climbed in a high-volatility session, with PSNY around $17.09, an intraday high near $17.38, and volume above 200,000 shares in the latest read—strong activity for a stock that has been trading in “headline-driven” bursts. [3]
The market’s focus is straightforward: Polestar has been working to secure financing and reduce pressure from its debt stack, and the latest announcements directly address those concerns—at the cost of potential dilution (more on that in a minute). [4]
The main catalyst: $300 million equity investment plus a $300 million debt-to-equity conversion
On December 19, 2025, Polestar announced a $300 million equity investment split evenly between Banco Bilbao Vizcaya Argentaria (BBVA) and NATIXIS—$150 million each. [5]
At the same time, Geely Sweden Holdings AB (part of the Geely ecosystem, Polestar’s majority-owner sphere) agreed with Polestar to convert approximately $300 million of principal and interest owed under a term facility agreement dated November 8, 2023 into equity, subject to any required regulatory approvals. [6]
The deal mechanics investors care about
A few details matter because they shape both upside and risk:
- Pricing: The equity purchase price was set at $19.34 per Class A ADS, described as the 3‑month volume-weighted average price (VWAP) preceding the definitive agreement (rounded up). [7]
- Ownership cap: Polestar said no single participating financial institution in this equity financing would own more than 10% of Polestar’s outstanding equity after closing. [8]
- Timeline: Polestar said the transactions were expected to close by December 23, 2025, and noted that no regulatory approvals were required for the equity investment portion. [9]
- Exit path for the banks: BBVA and Natixis each entered into put option arrangements with a wholly-owned subsidiary of Geely Sweden Holdings AB, giving them an “exit path” in three years with certain returns (per the press release). [10]
This structure is unusual enough to matter: it signals that traditional financial institutions are willing to provide equity capital, but only with a defined escape hatch—effectively a “belt-and-suspenders” approach to Polestar risk. [11]
The tradeoff: Liquidity improves, but dilution risk rises
Fresh equity and debt-to-equity conversions typically strengthen liquidity and reduce leverage, but they also expand the equity base—meaning existing shareholders can be diluted. Polestar’s own disclosures frame the transactions as balance-sheet strengthening; markets often cheer the runway extension first and argue about dilution later. [12]
Geely support expands: Up to $600 million subordinated term loan facility
Polestar’s other major December headline is a subordinated term loan facility of up to $600 million with a wholly owned subsidiary (as lender) of Geely Sweden Holdings AB, with the last $300 million requiring lender consent depending on Polestar’s future liquidity needs. The company said the facility is available for general corporate purposes. [13]
Reuters added a key point markets tend to underline in neon: the loan is described as “subordinated,” and Polestar indicated it does not count toward the company’s debt covenant limits (Reuters cited covenants set at $5.5 billion). [14]
In plain English: this is Geely acting as a financial backstop, and doing it in a way that (at least structurally) tries not to trip existing lender constraints. That’s valuable for a company that has repeatedly had to manage covenants while funding operations. [15]
The Nasdaq compliance angle: ADS ratio change (a “reverse split” by another name)
A major technical shift in December is Polestar’s ADS ratio change—a move designed to mechanically raise the per‑share trading price and help with listing compliance optics.
Polestar announced that the ratio of its American Depositary Shares to ordinary shares would change from 1 ADS : 1 ordinary share to 1 ADS : 30 ordinary shares, effective December 9, 2025 (with the trading-price effect expected at the open that day). [16]
Key details from the company’s disclosures:
- Holders would receive 1 new ADS for every 30 existing ADSs (with the old ADSs cancelled). [17]
- No fractional ADSs would be issued; fractional entitlements would be aggregated and sold, with net cash proceeds distributed to holders (after fees, taxes, expenses). [18]
- Polestar emphasized the change does not alter underlying ordinary shares and does not change an ADS holder’s percentage ownership or voting power (aside from cash-in-lieu for fractions). [19]
Earlier, Reuters described Polestar’s listing pressure bluntly: the stock had been languishing under $1, drawing Nasdaq delisting risk, and the company moved toward a reverse-split mechanism as losses mounted. [20]
This matters for investors because ratio changes / reverse splits often bring:
- short-term volatility,
- shifts in liquidity and retail participation, and
- a spotlight on fundamentals (because the “price fix” doesn’t fix margins). [21]
Polestar’s fundamentals: Revenue growth, heavy losses, and the margin story
Polestar’s most recent detailed snapshot (as of the latest filings and releases available by Dec. 24) shows a company growing revenue but still wrestling with profitability.
From Polestar’s unaudited results for Q3 2025 and the first nine months of 2025:
- Revenue (first nine months 2025):$2.171 billion, up 48.8% year-over-year. [22]
- Revenue (Q3 2025):$748 million, up 36.0% year-over-year. [23]
- Net loss (first nine months 2025):$(1.558) billion vs $(867) million in the comparable period. [24]
- Net loss (Q3 2025):$(365) million vs $(323) million in Q3 2024. [25]
- Cash balance:$995 million (as reported in the release). [26]
Margins are where things get weird (and not in the fun physics way—more in the “accounting gravity well” way):
- Polestar reported gross margin of (34.5%) for the first nine months of 2025, which it attributed largely to a non-cash impairment on the Polestar 3 of $739 million booked in Q2 2025. [27]
- Its adjusted gross margin (non‑GAAP) for the first nine months was (1.8%), slightly improved vs. the prior year’s adjusted figure, with carbon credits sales called out as one contributor. [28]
Operationally, Polestar reported:
- Retail sales (first nine months 2025):44,482 cars, up 36.5% year-over-year. [29]
- Retail sales (Q3 2025):14,192 cars, up 13.1% year-over-year. [30]
So the operating picture is a classic “growth vs. gravity” setup: volumes and revenue are moving in the right direction, but costs, tariffs, pricing pressure, and residual value dynamics keep pulling profitability back down. [31]
What forecasts say about Polestar stock: Price targets, ratings, and a big caveat
Analyst coverage on Polestar remains relatively thin compared with mega-cap automakers, and that matters because “consensus” can be fragile when only a handful of analysts are publishing targets.
MarketScreener data listed 3 analysts with a mean consensus of Hold and an average target price of $30.00, with the page also showing “Sell” in its consensus panel (reflecting its internal aggregation display). [32]
Two important caveats investors should keep front-of-mind:
- Targets may lag fast-moving capital structure changes. Between the ADS ratio change (Dec. 9) and the financing package (mid-to-late Dec.), the “shape” of PSNY trading has changed quickly. [33]
- Low analyst count means targets can swing dramatically if a single firm revises assumptions on dilution, drawdown needs, or demand. [34]
In other words: consensus targets can be a reference point, but they’re not a substitute for reading the financing terms and watching cash and margins.
The risk list investors keep circling
Even after today’s rally, the market’s skepticism isn’t random—it’s rooted in specific, recurring issues:
- Profitability remains elusive. Q3 net loss was $365 million, and the nine-month net loss was $1.558 billion (including impairment effects). [35]
- Tariffs and pricing pressure hit margins. Reuters highlighted U.S. tariffs and cost pressures, and Polestar’s filings cite pricing pressure and residual value guarantee costs (especially in North America). [36]
- Funding needs can translate into dilution. The equity investment and debt conversion strengthen liquidity, but additional equity issuance (direct or indirect) can weigh on per-share economics. [37]
- Cost-cutting can be disruptive. Business Insider reported Polestar closed two UK R&D sites and laid off staff as it consolidated work back to Sweden—part of a broader restructuring trend. [38]
- Listing optics can amplify volatility. The ADS ratio change helps mechanically raise the share price, but it doesn’t fix fundamentals—and reverse-split dynamics sometimes attract short-term trading rather than long-term conviction. [39]
What to watch next: The 2026 catalysts that could move PSNY
For readers tracking Polestar stock into year-end and early 2026, these are the near-term “checkpoints” that can change the narrative fast:
- Finalization and downstream effects of December financing
The market will watch how quickly Polestar can translate new funding capacity into a clearer liquidity runway—and whether more capital is needed on top. [40] - Regulatory approvals for the Geely debt-to-equity conversion
Polestar said the conversion is expected after receiving any necessary approvals; updates here can affect leverage, interest burden, and dilution expectations. [41] - Q4 2025 sales print (scheduled)
Polestar said it expects to report Q4 2025 retail sales volumes on January 9, 2026—a data point that can confirm whether 2025’s growth momentum held into year-end. [42] - Margins, not just deliveries
Investors will want evidence that price/mix improvements, cost reductions, and carbon credit contributions can lift underlying profitability—because growth without margin repair is a treadmill, not a turnaround. [43]
Bottom line on Polestar stock on December 24, 2025
Polestar’s December story is basically: “Survive first, thrive later.” The stock’s jump today reflects genuine relief that liquidity is being addressed with multiple levers—equity, debt conversion, and a Geely-backed loan facility. [44]
But the longer-term rerating of PSNY still hinges on whether Polestar can convert delivery growth into durable margins in a tariff- and competition-heavy EV market—without repeatedly tapping shareholders for more capital. [45]
References
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