Shares of Polestar Automotive Holding (NASDAQ:PSNY) plunged to a record low three months after its debut on the NASDAQ stock exchange, underscoring the macroeconomic troubles currently weighing on the electric vehicle (EV) sector.
Polestar dropped 5.17% to $5.69 at the market close on Monday. Moreover, the stock is down about 49% in the past three months (since its IPO in June this year), making it one of the stocks that are leading the losses in this sector.
Rising interest rates and elevated input costs, along with supply shortages of parts and lithium are not boding well for the sector’s production and future earnings, impacting Polestar’s growth.
Apart from high costs, the one-time share-based listing charge incurred by Polestar during its merger with blank-check company Gores Guggenheim is a big weight on its operating detail calculations.
Is Polestar a Good Company to Invest in?
Moreover, rapid expansion efforts are making many investors and experts speculate that the company might not have sufficient funds to meet cash requirements this year, and may need to borrow additional funds to run operations. During a time of rising interest rates, this is not something investors would like to hear.
Wall Street is cautious too, with a Hold rating on the stock, based on one Buy, one Hold, and one Sell. The average price target currently stands at $11.5, indicating a 102.1% upside potential.