Polestar Secures Major Funding, Shares Rally

Polestar Auto.adr/a US7311052010

Shares of Swedish electric vehicle manufacturer Polestar Auto (ADR) surged on Monday following the announcement of a substantial $600 million financing package. The transaction, expected to close imminently, is designed to provide crucial liquidity for the company's balance sheet and ongoing operations. The stock advanced by more than 10%, closing the session at $14.13.

The comprehensive funding plan directly targets Polestar's elevated debt levels through two distinct mechanisms. The first component is a $300 million equity raise. Two European financial institutions, Banco Bilbao Vizcaya Argentaria (BBVA) and NATIXIS, are each contributing $150 million, acquiring shares at a price of $19.34 per share.

Complementing this, the company's major shareholder, Geely Sweden Holdings, is executing a $300 million debt-to-equity conversion. By transforming outstanding loans into new equity, this move is pivotal for reducing Polestar's total debt, which recently stood at approximately $5.65 billion, and alleviating its interest burden.

Strategic Timing and Investor Sentiment

This capital infusion arrives at a critical juncture in CEO Michael Lohscheller’s "Reset" strategy for the automaker. While Polestar reported a net loss of $365 million for the third quarter of 2025, its revenue for the first nine months of the year showed strong growth, increasing by 48.8% to $2.17 billion.

The positive market response underscores an expectation that this financing, coupled with a separate $600 million credit facility from Geely, will grant Polestar the necessary runway to hit upcoming production milestones. The company is currently expanding its manufacturing footprint in North America and Asia as it ramps up delivery of its Polestar 3 and Polestar 4 models.

Path Forward and Key Metrics

With the funding anticipated to be finalized shortly, attention is shifting to the firm's longer-term financial trajectory. The next significant catalyst for the equity will likely be the release of full-year 2025 results in early 2026. Market observers will be keenly watching to see if the shift to a traditional dealership network in key markets can improve margins, which have recently been in negative territory.

From a technical perspective, the recent rally is testing resistance levels near $15.00 per share. This follows a 1-for-30 reverse stock split executed in December, a move that successfully restored the company's compliance with Nasdaq listing requirements.