Polestar (PSNY) Stock Crashes After Q3 Loss—Desperate Reverse Split to Dodge Nasdaq Delisting

Another day, another EV startup bleeding cash.

Polestar—the Tesla wannabe that can't seem to stop burning through investor money—just posted another ugly quarterly loss. Shares tanked as the Swedish automaker scrambles to avoid Nasdaq's chopping block with a last-ditch reverse stock split.

Here's the autopsy:

• Q3 earnings: More red ink than a squid fight
• Survival tactic: Share consolidation Hail Mary
• Market reaction: Investors fleeing like it's a sinking Volvo

The reverse split gambit reeks of desperation—a classic 'extend and pretend' move from a company that's clearly struggling to justify its valuation. But hey, at least Wall Street's financial engineering PhDs get to earn their keep.

Memo to EV bulls: Maybe wait until these companies actually turn a profit before throwing more money at them?

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During the quarter, Polestar’s net loss widened by 13% to reach $365 million, down from $323 million a year ago. This is despite the electric vehicle producer, which is backed by Geely (GELYF), growing its revenue by 36% to $748 million, up from $550 million during the same period last year. The revenue figure fell below Wall Street’s $850 million consensus.

Polestar Losses Widen

The widening losses come as the electric Maker continues to battle several headwinds, including U.S. tariffs, delays in model releases, and intense competition in the E.V. market, where Chinese rivals continue to gain ground. Polestar is also battling debt issues.

In the just-ended quarter, the costs of residual value guarantees also contributed to deepening the struggling carmaker’s losses. This guarantee is an amount Polestar pays customers when the minimum resale value of its vehicles promised to them falls below the stated value upon resale.

Earlier this year, Polestar also launched a “conquest campaign” where it offered  U.S. Tesla owners a discount of up to $20,000 for a Polestar 3 lease.

Polestar Turns to Reverse Stock Split

Over the last year, Polestar’s U.S.-listed shares have traded between 70 cents and $1.42 per share. Furthermore, PSNY stock in recent days has struggled to reach $1 per share. The price of its shares has dropped more than 23% since January.

Consequently, Nasdaq recently issued a notice to the EV producer, noting that its American Depositary Shares had fallen below the exchange’s minimum bid price requirement of $1 for at least 10 consecutive business days. Nasdaq warned that Polestar had until April 29, 2026, to regain compliance or risk delisting.

To avoid this, Polestar is now planning to carry out a reverse stock split. This means that it will combine multiple shares into one, thereby reducing the number of its existing shares while raising their prices. However, the value of the shares remains the same as before the split.

Is Polestar a Buy or Sell?

On Wall Street, Polestar’s shares currently have a Moderate Sell consensus rating. This is based on two Holds and one Sell issued by analysts over the past three months.

However, the average PSNY price target of $1 suggests more than 25% growth potential from the current trading level.