"The last thing any public company wants to see is that it has a "going concern" warning, which acknowledges it may have little time to survive. The term means a company may need to restructure or liquidate part of its business. Electric vehicle (EV) company Polestar Automotive Holding UK PLC ( NASDAQ: PSNY) disclosed the problem yesterday. The announcement caused a collapse in the EV firm's shares."
"They have dropped to $1.04. A little more than four years ago, the stock traded at $16. The disclosures came with Polestar's earnings. "Uncertainty related to the execution of management's liquidity and funding plan indicates the existence of a material uncertainty that may cast significant doubt upon Polestar's ability to continue as a going concern," it said. For the six months ending June 30, it reported that revenue rose to $1.4 billion from $909 million last year."
"As a result of the figures, CFRA analyst Garrett Nelson downgraded shares to Sell from Hold. He lowered his $1 price target to $0.50. He worried whether Polestar can reach a size where it is even modestly competitive. "We see Polestar's struggles continuing as EV incentives are discontinued in the U.S. and as consumers increasingly turn toward hybrids," he said."
Polestar disclosed a going-concern warning tied to uncertainty executing its liquidity and funding plan, triggering a sharp stock decline to $1.04 from about $16 four years ago. Revenue for the six months ended June 30 rose to $1.4 billion from $909 million, yet losses widened to $1.13 billion versus $554 million a year earlier. Quarterly unit sales increased to 18,049 from 13,072, while the company withdrew guidance. CFRA downgraded the shares and cut the price target to $0.50, citing concerns about scale, ending U.S. EV incentives, consumer shifts to hybrids, and competition from lower-priced EVs and legacy automakers.
Read at 24/7 Wall St.
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