Shares of Polestar are set to debut under the ticker “PSNY” on Friday, making it the latest electric vehicle maker to go public via a merger with a special purpose acquisition company, or SPAC.
Polestar said its stock will begin trading on the NASDAQ exchange after it completed its merger with the SPAC Gores Guggenheim. Polestar CEO Thomas Ingenlath said the company will use the roughly $850 million raised from the deal to fund its three-year plan to build new vehicles and eventually become profitable.
But Ingenlath said Polestar, which began as a joint venture between Sweden’s Volvo Cars and Chinese auto giant Geely in 2017, has progressed beyond startup status.
SPAC deals have become a more popular way for companies to go public in recent years. The disclosures required are simpler than those in a traditional initial public offering.
Unlike in a traditional IPO, companies participating in a SPAC merger are allowed to present forward-looking projections to investors, which can help justify a lofty valuation. But there’s no guarantee that those forecasts will come true.
So far, most SPAC mergers with electric vehicle companies haven’t worked out well for investors. Even Lucid Group (NASDAQ:LCID) is trading at 67% below its post-merger high, Fisker (NYSE:FSR) at 69% below, and Nikola (NASDAQ:NKLA) at 92% below. EV truck maker Rivian (NASDAQ:RIVN), which went public via a traditional IPO, has also struggled. Its shares are down 84% from its post-IPO high.
PSNY shares grabbed 75 cents, or 6.7%, to $11.98, mid-morning Friday.
