PSNY Stock In Spotlight Ahead Of 1-For-30 Reverse Split
Synopsis
The ratio will change from one ADS per ordinary share to one ADS for every 30 ordinary shares.
- There will be no change to the company’s Class A, Class B, Class-1, or Class C-2 ordinary shares.
- No fractional ADS will be issued; instead, they will be sold, and the cash proceeds will be distributed.
- Polestar had received a notification from Nasdaq in October for failing to comply with the $1 per share requirement.
Shares of Polestar (PSNY) slid 3% on Monday, ahead of a scheduled 1-for-30 reverse split of its American Depositary Shares (ADS) on Tuesday. The stock was trading at $0.55.
Companies often use reverse stock splits to boost their share price back above the $1 minimum required by major exchanges, allowing them to regain compliance after a deficiency notice and prevent delisting.
The ratio will shift from one ADS per ordinary share to one ADS for every 30 ordinary shares. Trading of the adjusted ADSs will begin on Tuesday on the Nasdaq. There will be no change to the company’s Class A, Class B, Class-1 or Class C-2 ordinary shares.
The company noted that no fractional ADS will be issued. Instead, they will be sold, and the cash proceeds will be distributed. The change will not affect ownership or voting power, the company added. Polestar said in October that it had received a notice from Nasdaq for failing to meet the exchange’s minimum $1 bid-price requirement.
Weak Q3
The Geely-owned Swedish carmaker has faced severe challenges due to tariffs, model delays, rising costs, and competition.
Last month, Polestar reported a wider third-quarter loss of $365 million, compared to the previous year’s loss of $323 million. The company said pricing pressure and higher production costs continued to weigh on results. The firm has cut about 20% of its workforce and is shifting more operations to Europe, where demand remains stronger.
How Did Stocktwits Users React?
Retail sentiment for PSNY on Stocktwits remained in the ‘bearish’ zone over the past 24 hours.
One user expressed skepticism about the stock in the wake of the expected reverse split.
Year-to-date, the Class A PSNY shares have fallen around 46%.
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