Polestar stock neared a debut as the Swedish EV startup, a rival to Tesla (TSLA), announced it will go public via a SPAC deal.
Owned by Chinese auto giant Geely, Polestar will combine with Gores Guggenheim (GGPI), a special purpose acquisition company or SPAC. The combined company will be named Polestar Automotive and will list on the Nasdaq under the ticker symbol PSNY.
The deal values Polestar at roughly $20 billion. It is expected to close in the first half of 2022.
A focus on high-performance electric cars positions Polestar as a rival to Tesla and Lucid. It recently brought its first fully electric car to market, the Polestar 2, challenging the Tesla Model 3. And it plans to start producing an electric SUV, the Polestar 3, in the U.S. next year. The Polestar 2 starts at $38,400 after federal tax credits.
As part of the deal, Polestar will receive an additional $250 million investment Polestar raised $550 million in its first external funding round in April.
SPACs are a hot investment vehicle on Wall Street. They allow companies promising high growth to list shares without having to go through a traditional initial public offering. In recent years, several EV startups, including Lucid as well as Nikola (NKLA), Lordstown (RIDE), Canoo (GOEV) and Fisker (FSR), came public through SPAC mergers.
Polestar Stock, EV Stocks
Gores Guggenheim, soon to be Polestar stock, gapped up 4.7% to 10.45 on the stock market today, hoisting shares above the 50-day line. Tesla stock rose 2.4% to 792.76, still in range from a 764.55 handle buy point cleared on Friday. Monday’s move pushed TSLA stock above its April short-term high of 780.79, according to MarketSmith chart analysis.
Lucid stock climbed 1.8% to 25.89, off intraday highs but approaching potential 29.91 and 29.13 buy points. Shares have rallied sharply in the past couple of weeks after its upcoming Air has a 520-mile range, far more than Tesla. LCID stock could soon have a handle in its consolidation, offering a slightly lower entry.
Among other EV stocks, Nikola rose 2.5%, Lordstown climbed 2.8%, Canoo tumbled 8% and Fisker rose 5.5%.
In 2017, Polestar emerged on the scene boldly aiming to challenge Tesla. It’s backed by Sweden’s Volvo and Geely.
Several of its peers that recently came public via SPAC mergers have had a wild ride. Canoo stock, a so-called meme play, has been especially volatile of late, swinging in and out of favor on social news site Reddit.
Find Aparna Narayanan on Twitter at @IBD_Aparna.
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