Polestar SPAC: Everything you need to know about Polestar stock
Rebecca Cattlin October 7, 2021 2:10 AM
Swedish electric vehicle company Polestar is planning an IPO via a SPAC deal with Gores Guggenheim that could value the firm at around $20 billion. Find out everything we know about the company ahead of its listing.
Polestar SPAC: When will Polestar stock go public?
Polestar is expected to go public in via a SPAC deal with blank cheque company Gores Guggenheim in the first half of 2022. The agreement was announced on September 27, and the deal is
expected to close once Gores Guggenheim’s stockholders have approved it. SPAC deals usually happen a lot faster than traditional IPOs and with much less warning for public investors.Learn about what SPAC deals are and how they differ from IPOs
Upon closing of the deal, the combined company will be publicly traded under the name Polestar Automotive Holding UK Limited. It is expected to be listed on Nasdaq with the ticker symbol ‘PSNY’.
Proceeds from the SPAC deal are expected to be $800 million from Gores Guggenheim and $250 million from private investment in public equity (PIPE) funding.
Citi is the exclusive financial advisor to Polestar, while Deutsch Bank is advising Gores Guggenheim alongside Morgan and Stanley, Barclays, and Guggenheim Securities.
How much is Polestar worth?
Polestar is worth approximately $20 billion according to the expected enterprise value following its SPAC deal with Gores Guggenheim. Typically all SPACs are priced at $10 initially, with additional warrants sold at $11.50 each.
How to trade Polestar stock
Once the SPAC deal has completed, you can trade Polestar in the same way as any other share on the market. Until then it will trade as Gores Guggenheim.
In the meantime, choose from thousands of other global stocks with City Index.
- Open a City Index account, or log in if you’re already a customer
- Search for the company you want to trade in our award-winning platform
- Choose your position and size, and your stop and limit levels
- Place the trade
Alternatively, if you’re not ready to trade live markets – but want to practise ahead of the Polestar listing – you can set up a free demo account to trade in a no-risk environment.
What does Polestar do?
Polestar is an electric vehicle (EV) manufacturer based in Gothenburg, Sweden. The company was established in 2017 and has grown significantly due to the influence of its parent company Volvo Cars.
Polestar is known for creating high-performance cars with cutting-edge electric technology – it produces both hybrid and fully electric cars. The company has two award-winning electric performance cars, the Polestar 1 and Polestar 2, which are already on roads across Europe, North America and Asia. It has plans to launch three new models by 2024.
How does Polestar make money?
Polestar makes money through the sale of its cars and subsequent upgrades. Polestar currently has two cars in its portfolio:
- The Polestar 1 is a low-volume electric performance hybrid, with an electric range of 124km – the longest of any hybrid car in the world. The car costs over $150,000
- The Polestar 2 is an electric performance fastback, which is the company’s first fully-electric, high-volume car. The car starts retailing at $59,900 and has a range of 260 miles
It delivered approximately 10,000 vehicles in 2020 and expects to sell approximately 290,000 vehicles per year by 2025.
Polestar’s revenue is generated via digital sales. The company’s website enables customer to complete the end-to-end order process themselves, but they can also visit a ‘Polestar Spaces’ to see and test the car before they buy online. Currently Polestar has over 40 Spaces across 10 markets.
Is Polestar profitable?
Polestar is not yet profitable according to the Volvo Cars Annual Report 2020. The subsidiary had a total loss for the year of MSEK 2,691 million – $307.87 million. Over the same period, Polestar earned MSEK 5,540 million ($645 million) in revenue.
Although Polestar is not yet profitable, this isn’t necessarily going to be a deterrent for investors. Polestar’s $20 billion valuation is approximately 3x 2023 revenue expectations and 1.5x 2024 revenue estimates, and about 38x its 2020 revenue. As a comparison, Tesla trades at about 19.96x its 2020 revenue.Discover how to read a company's earnings report
What is Polestar's business strategy?
Polestar believes the deal with Guggenheim will enable the company to accelerate future growth, build its strategy and aid its missing toward sustainable mobility. The money raised through the SPAC will be used to fund investment in new models and help Polestar expand its operations and markets.
There is no news yet of what dividends Polestar investors are likely to receive. As the SPAC financing is going toward a rapid expansion, it’s unlikely there will be any for a while as most growth companies reinvest profits rather than distributing them to shareholders.
The Polestar 3, an electric performance SUV, is slated for future production after a design was released in 2020. The Polestar 3 would directly compete with the Tesla Model S. This release would be quickly followed by two other models, to achieve the company’s goal of three new cars before 2024.
In April 2021, Polestar has announced its intention to create a truly climate-neutral car by 2030. This would include an interior built from environment-friendly materials, including recycled PET bottles, reclaimed fishing nets, and recycled cork vinyl. Polestar is also currently the only EV manufacturer in the world to use blockchain-traced cobalt, meaning that no artisanal cobalt can its supply chain – artisanal cobalt mining has been maligned for its environmental, social and human rights abuses.
Over the next few years, Polestar has plans to add more Polestar Spaces, and expand into more markets to support future volume opportunities.
Who owns Polestar?
Polestar is owned by Volvo Group and affiliates of Geely Chairman Eric LI. The company is also backed by activist and actor Leonardo DiCaprio. Volvo is also getting ready to list, in an IPO that could value it at $30 billion. Approximately $10 billion of that figure is attributed to its ownership of Polestar.
Polestar has raised a total of $550 million across two funding rounds, the last of which was in July 2021. The funding came from investors including Volvo Cars Group, Zibo Financial Holding, Chongqing Chengxing Equity, SK Holding, Zibo Hightech Industrial Investment and I Cube Capital.
Following the deal, current Polestar equity holders will retain around 94% ownership in Polestar and roll 100% of their equity interests into the new company.
Board of directors of Polestar
Polestar hasn’t yet announced a complete board of directors. In 2020, Polestar announced the addition of two members of the board Yankun Hou and David Richter, who would be joining Håkan Samuelsson, Chairman of the Board and CEO of Volvo Cars.
This report is intended for general circulation only. It should not be construed as a recommendation, or an offer (or solicitation of an offer) to buy or sell any financial products. The information provided does not take into account your specific investment objectives, financial situation or particular needs. Before you act on any recommendation that may be contained in this report, independent advice ought to be sought from a financial adviser regarding the suitability of the investment product, taking into account your specific investment objectives, financial situation or particular needs.
StoneX Financial Pte. Ltd., may distribute reports produced by its respective foreign entities or affiliates within the StoneX group of companies or third parties pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the report is distributed to a person in Singapore who is not an accredited investor, expert investor or an institutional investor (as defined in the Securities Futures Act), StoneX Financial Pte. Ltd. accepts legal responsibility to such persons for the contents of the report only to the extent required by law. Singapore recipients should contact StoneX Financial Pte. Ltd. at 6826 9988 for matters arising from, or in connection with the report.
In the case of all other recipients of this report, to the extent permitted by applicable laws and regulations neither StoneX Financial Pte. Ltd. nor its associated companies will be responsible or liable for any loss or damage incurred arising out of, or in connection with, any use of the information contained in this report and all such liability is hereby expressly disclaimed. No representation or warranty is made, express or implied, that the content of this report is complete or accurate.
StoneX Financial Pte. Ltd. is not under any obligation to update this report.
Trading CFDs and FX on margin carries a high level of risk that may not be suitable for some investors. Consider your investment objectives, level of experience, financial resources, risk appetite and other relevant circumstances carefully. The possibility exists that you could lose some or all of your investments, including your initial deposits. If in doubt, please seek independent expert advice. Visit cityindex.com.sg for the complete Risk Disclosure Statement.