UPDATE: Polestar stock is subdued on Tuesday. The stock has traded in a narrow band between $9.85 and $10.15 this morning and is flat at the moment. It is hard to say whether price action taking a snooze is the result of any one event, but the past week's posting of a double top at $10.34 may have bulls stroking their beard in uncertainty. That double top formation happened once on Friday and then again this past Monday. More than 458 call contracts expiring this coming Friday have been traded this morning for the $10 strike price. The last price was 22 cents, a decline of 27% from Monday.

PSNY stock closed up on Friday as a recovery across equity markets continued ahead of the weekend. EV stocks were also a noted gainer as some company-specific news helped the sector. Investors are now fully up to speed with the new ticker and name for Polestar (PSNY) having seen the merger with SPAC partner Gores Guggenheim (GGPI) complete on June 24.

Also readTesla Stock Deep Dive: Price target at $400 on China headwinds, margin compression, lower deliveries

EV stocks provide Polestar a helping hand

EV automaker stocks, as mentioned, ended the week positively on some broadly positive news across the sector which helped. NIO held its Power Day 2022 last week which improved sentiment following on from recent delivery data and further likely Chinese government EV incentives. Tesla outlined accelerated plans to make its charging network available to non-Tesla vehicles and Rivian (RIVN) posted some reassuring delivery data. The chart below plots Polestar (green line) versus TSLA (brown line), NIO (purple line), LCID (yellow line), and RIVN (blue line), showing how the Swedish EV builder company is outperforming all other US and Chinese EV makers

PSNY stock is spiking up in volatility terms while it does remain the strongest performer so far in 2022 of the main EV automaker stocks

GGPI merge completion increases Polestar volatility

Gores Guggenheim (GGPI) stock price action looks positively pedestrian by comparison to the range in PSNY stock since its official launch on June 24. Since completing the merge with the Special Purpose Acquisition Company (SPAC), Polestar shares have spiked up to $13.36 before falling back to $8.64 just a few days later. GGPI stock price had largely held above the notional $10 support level due to SPAC rules mandatory requiring to hold $10 in cash to return to shareholders in the event of a no-deal. That backstop has now been removed, and volatility has increased in the current PSNY stock form. The deal progression can be seen as an achievement in itself, as SPAC deals have collapsed in 2022. The doyen of corporate finance types in the pumped-up 2020 and 2021 years has fallen prey to tighter financial conditions and dampened investor optimism. 

Polestar new models coming?

Polestar began life with its initial hybrid vehicle the Polestar 1. This is no longer in production and has been superseded by the fully electric Polestar 2, an enviable-looking sedan.

Polestar 3 is the company's entry into the high-margin SUV sector and is key to the next phase in Polestar's development. The Polestar 3 will be made in the US and China and will be followed by the Polestar 4 which is a coupe SUV.

Polestar 3

Polestar 3

Polestar CEO Thomas Ingenlath, in a recent interview with TopGear.com, referred to Polestar's stunning-looking O2 concept car. The O2 is an electric four-seat hardtop convertible and was on show at a number of motor festivals around Europe this summer. As of yet, plans for the O2 appear to remain largely in the developmental phase. “My ambition is to make it a production car,” Ingenlath told TopGear.com, “but it’s not that easy.”

Polestar stock forecast: PSNY in price discovery

Polestar stock price remains largely in discovery mode. Investors are still trying to grapple with many unknowns as the company upscales its product range. The completion of the SPAC deal has certainly provided PSNY stock with plenty of cash (over $1 billion) but with limited production and revenue, investors are buying potential rather than cold hard revenue cash.

In the current market environment, potential has been marked lower as interest rates rise. The strong employment report last Friday is actually a headwind for early-stage companies. The Fed has space to continue its aggressive rate rises meaning future cash flows get discounted at higher rates and the equity versus bond premium narrows. We remain neutral here. Note the potential double bottom at $8.60 which could result in a short-term catalyst.

PSNY stock chart, daily

*The author is short Tesla.


Like this article? Help us with some feedback by answering this survey:

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Feed news Join Telegram

Recommended content


Recommended content

Editors’ Picks

EUR/USD struggles to gather momentum, stays near 1.0350

EUR/USD struggles to gather momentum, stays near 1.0350

EUR/USD is having a difficult time gathering bullish momentum and fluctuating at around 1.0350 in the American session. With Wall Street's main indexes pushing lower after the opening bell, the US Dollar is gathering strength and not allowing the pair to gain traction.

EUR/USD News

GBP/USD falls below 1.2000 as mood sours

GBP/USD falls below 1.2000 as mood sours

GBP/USD has turned south and declined below 1.2000 in the second half of the day on Tuesday. The negative shift witnessed in risk sentiment seems to be helping the US Dollar find demand and forcing the pair to stay on the back foot.

GBPUSD News

Gold rebound loses momentum, upside limited below $1,760

Gold rebound loses momentum, upside limited below $1,760

Gold is rising on Tuesday, recovering after Monday’s slide. XAU/USD bottomed during the Asian session It then started to recover amid a rally of commodities and also emerging market currencies. 

Gold News

Bitcoin price hears jingle bells rolling in

Bitcoin price hears jingle bells rolling in

Bitcoin price looks set to rally substantially higher now that the social unrest in China is calming down. BTC could stage a 17% rally in the coming week.

Read more

Alibaba shares advance 5% on reduced China covid restrictions

Alibaba shares advance 5% on reduced China covid restrictions

BABA stock has jumped more than 5.2% in Tuesday’s premarket to $80 after China's National Health Commission said covid-related lockdowns should end as soon as possible. 

Read more

Forex MAJORS

Cryptocurrencies

Signatures