{"id":71368,"date":"2023-10-11T09:48:13","date_gmt":"2023-10-11T13:48:13","guid":{"rendered":"https:\/\/ifintechworld.com\/markets\/polestar-wants-to-raise-money-why-the-stock-is-falling\/"},"modified":"2023-10-11T09:48:17","modified_gmt":"2023-10-11T13:48:17","slug":"polestar-wants-to-raise-money-why-the-stock-is-falling","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=71368","title":{"rendered":"Polestar Wants to Raise Money. Why the Stock Is Falling."},"content":{"rendered":"<div id=\"js-article__body\" itemprop=\"articleBody\" data-sbid=\"WP-BAR-0000765993\">\n<div data-layout=\"wrap\n              \" data-layout-mobile=\"\" class=\"\n        media-object\n        type-InsetMediaIllustration\n          wrap\n  article__inset\n        article__inset--type-InsetMediaIllustration\n          article__inset--wrap\n    article__inset--lead\n  \"><\/p>\n<p>        <!-- eventually when we know what this card will be we can change it and leave this one --><\/p>\n<figure class=\"\n        media-object-image\n        enlarge-image\n        img-wrap\n        article__inset__image\n      \" itemscope=\"\" itemtype=\"http:\/\/schema.org\/ImageObject\"><\/p>\n<\/figure><\/div>\n<p>A potential capital raise from Swedish electric-vehicle maker<br \/>\n        Polestar Automotive<br \/>\n       has its American depositary receipts sliding. That says more about Polestar investors than about the company.<\/p>\n<p>Polestar (ticker: PSNY) showed its intention to raise $1 billion. That isn\u2019t a shock. Still, the hint of new capital is pushing down shares sharply. <\/p>\n<div class=\"paywall\">\n<p>Tuesday evening, Polestar filed a \u201cshelf\u201d registration with the Securities and Exchange Commission. There are no immediate plans to sell shares or raise debt. A shelf registration gives the company the option to sell securities by registering them ahead of time. A company has securities \u201con the shelf\u201d ready to sell when the time is right. It isn\u2019t a great name.<\/p>\n<p>The filing isn\u2019t unusual. The stock reaction shows how skittish investors have become over EV start-ups\u2019 need to raise additional money.  <\/p>\n<p>Shelf registrations are a part of managing a publicly traded business. Still, Polestar ADRs are down 7.2% in premarket trading while<br \/>\n        S&amp;P 500<br \/>\n       and<br \/>\n        Nasdaq Composite<br \/>\n       futures were up 0.2% and 0.3%, respectively. <\/p>\n<p>\n        Rivian Automotive<br \/>\n       (RIVN) stock dropped about 23% on Oct. 5 after announcing plans to sell $1.5 billion in convertible notes. Everyone knows or should know, that Rivian will need more capital to build its business. Wall Street doesn\u2019t project positive cash flow for most of this decade. Still, investors and Wall Street reacted harshly with reasons given ranging from the timing was poor to the raise was a surprise. <\/p>\n<p>UBS analyst Joe Spak used the dip to upgrade Rivian shares to Buy from Hold. He wasn\u2019t surprised by the raise. <\/p>\n<p>The Rivian and Polestar drops say more about investor sentiment than it does about either company. Sentiment is weak. Polestar ADRs, coming into Wednesday trading, has dropped 39% in the past three months. Rivian shares are down 21% over that span.<br \/>\n        Lucid Group<br \/>\n       (LCID) shares are down 33%. <\/p>\n<p>It isn\u2019t easy to be an EV start-up, needing cash. Wall Street doesn\u2019t project positive free cash flow for Polestar until 2028 at the earliest, according to FactSet. That isn\u2019t a reliable estimate either. There is only one brokerage estimate for 2028 in FactSet. Most analysts projected two or three years into the future. <\/p>\n<p>Polestar and Rivian both have to compete with<br \/>\n        Tesla<br \/>\n       (TSLA), which boasts strong profit margins, and positive free cash flow. Traditional auto makers such as<br \/>\n        Ford Motor<br \/>\n       (F) don\u2019t make profits selling EVs yet, but they make billions selling gasoline-powered cars. <\/p>\n<p>Polestar delivered 13,900 vehicles in the third quarter, and says it\u2019s on track to sell as many as 70,000 this year. <\/p>\n<p>Write to Brian Swint at brian.swint@barrons.com and Al Root at allen.root@dowjones.com<\/p>\n<\/p><\/div>\n<\/div>\n<p>Read the full article <a href=\"https:\/\/www.marketwatch.com\/articles\/ev-startup-polestar-stock-falling-d8f9502c?mod=markets\" target=\"_blank\" rel=\"noopener\">here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"<p>A potential capital raise from Swedish electric-vehicle maker Polestar Automotive has its American depositary receipts sliding. That says more about Polestar investors than about the company. Polestar (ticker: PSNY) showed its intention to raise $1 billion. That isn\u2019t a shock. Still, the hint of new capital is pushing down shares sharply. Tuesday evening, Polestar filed [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":71369,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"gallery","meta":{"footnotes":""},"categories":[241],"tags":[83],"class_list":["post-71368","post","type-post","status-publish","format-gallery","has-post-thumbnail","hentry","category-markets","tag-featured","post_format-post-format-gallery"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Polestar Wants to Raise Money. Why the Stock Is Falling. | iFintechWorld<\/title>\n<meta name=\"description\" content=\"A potential capital raise from Swedish electric-vehicle maker Polestar Automotive has its American depositary receipts sliding. 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