Polestar Shares Plunge Amid Reverse Split and Nasdaq Warning

Polestar Automotive Holding UK PLC (NASDAQ: PSNY) saw its share price tumble dramatically in recent trading, hitting a new 52-week low. The sell-off was driven by a confluence of negative catalysts, including market reaction to a recently enacted reverse stock split, persistent concerns following third-quarter results, and a formal deficiency notice from the Nasdaq exchange.

The stock's intraday decline reached as much as 26.7%, with shares bottoming at $14.1001. It closed the session significantly below the previous day's closing price of $18.29.

Analysts point to three primary factors behind the sharp decline. First, the company's 1-for-30 reverse stock split, which took effect on December 9, triggered a wave of selling pressure. While such a corporate action mechanically raises the per-share price, it is often viewed negatively by the market in the short term.

Second, disappointing Q3 2024 financial results continue to weigh heavily on investor sentiment. The electric vehicle maker reported revenue of $748 million, a figure that fell substantially short of analyst expectations, which were for over $905 million. The gross margin deteriorated to negative 6.1%, a decline of nearly five percentage points year-over-year. Furthermore, the net loss widened to $365 million, compared to a $323 million loss in the prior-year period.

Despite a 36% year-over-year increase in revenue and a 13% rise in retail deliveries to 14,000 vehicles, the company's path to profitability remains elusive.

Should investors sell immediately? Or is it worth buying Polestar Auto.adr/a?

The third major pressure point is a notification from Nasdaq regarding non-compliance with its minimum bid price rule. The exchange requires a minimum closing bid price of $1.00 per share. Polestar has been granted a compliance period until April 29, 2026, to rectify this issue.

Financial Health and Market Sentiment

An assessment of the company's financial standing and analyst ratings presents a challenging picture. Data from MarketBeat shows a consensus ranging from "Hold" to "Sell," while Seeking Alpha's coverage reflects a similar cautious stance. The financial analysis platform InvestingPro rates Polestar's financial health as "WEAK," citing a negative EBITDA of approximately -$1.7 billion and a current ratio of 0.43. The platform also notes a significant need for financing that could lead to further equity measures and potential shareholder dilution.

In a move to stimulate near-term demand, Polestar has announced a temporary price reduction of $18,000 on the 2025 Polestar 3 model. This brings the starting price down to $49,500 for orders placed before January 2, 2026, ahead of the launch of updated 2026 models.

Looking Ahead: Key Dates and Challenges

The immediate future for Polestar investors hinges on two critical deadlines. The first is the expiration of the promotional pricing on the Polestar 3 on January 2, 2026. The second, and more consequential, is the Nasdaq compliance deadline of April 29, 2026.

Between now and then, the stock's trajectory will likely be influenced by any announcements concerning capital-raising activities, balance sheet improvements, or operational progress. The current situation is defined by tension: while the company demonstrates growth in sales and deliveries, these positives are currently overshadowed by significant deficits in profitability and key financial metrics.