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Polestar Is Preparing A SPAC Deal: Market Cap May Reach $20 Billion

Being owned by Geely does not mean that Volvo and Polestar are not considering going public. On the contrary: Volvo announced on May 12 that it was wondering about an IPO (initial public offering). On the other hand, Polestar wants to sell shares in a quicker way that involves a merger with a SPAC (special purpose acquisition company). The WSJ (Wall Street Journal) anticipated that the Volvo spin-off would announce on September 27 that it would go public thanks to the Gores Guggenheim Inc. SPAC. The deal was just confirmed by Polestar.
Polestar SPAC and Future Products 6 photos
Thomas Ingenlath and the Polestar PreceptPolestar 3PolestarPolestar SPAC and Future ProductsPolestar SPAC and Future Products
The new company will be called Polestar Automotive Holding UK Limited. When the deal is finalized, the company will trade at NASDAQ under the PSNY ticker. Polestar disclosed that it expects to reach a market cap of $20 billion, which would represent three times its estimated 2023 revenue and 1.5 times its 2024 result. In other words, Polestar thinks it is worth a lot more than the $20 billion.

Apart from Polestar, other companies such as Lucid, Nikola, and Lordstown Motors chose SPACs to start negotiating shares and raising money in the capital market. The difference between going public through an IPO or SPAC is that the SPAC makes an IPO to raise money and eventually merge with a startup.

Since the merger is a more straightforward process than the IPO, that saves time. Rivian preferred the more traditional approach and is planning an IPO. The creator of the R1T and R1S expects to reach $80 billion in market cap.

The transaction involves $800 million coming from Gores Guggenheim Inc. and $250 million from PIPE financing, which includes investors such as the Volvo Car Group, “affiliates of Geely Chairman Eric Li,” and the actor Leonardo DiCaprio. This money will be invested in bringing three more products to the market by 2024: the Polestar 3 in 2022 and two other EVs until that deadline.

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