Polestar’s PSPC deal fuels rapid expansion

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Polestar’s $ 20 billion valuation includes debt, although the company did not specify an amount.

Polestar is following the lead of Lucid Motors of Newark, Calif., Which turned its own SPAC deal into a market cap of around $ 40 billion last week, even before the first deliveries of its six-figure electric sedan.

But some electric vehicle manufacturers backed by PSPC, such as Nikola and Lordstown Motors, have been found to overestimate the capabilities of their products or to misrepresent customer orders. This raises the question of whether these “backdoor IPOs” are capitalizing companies that might otherwise not withstand the financial scrutiny involved in a traditional, slower IPO.

Ingenlath acknowledged the skepticism surrounding the dizzying valuations of EV startups made public through PSPCs.

“By the time we were evaluating this option, PSPCs were already very high profile,” said Ingenlath.

Polestar considered alternative financing solutions. “A [series] Round B would have been an option, going straight to an IPO would have been an option, ”said Ingenlath. “But this track, out of all the options we looked at, seemed to be the right one and the right one. “

The CEO described the SPAC model as an “efficient way” to raise funds, compared to the lengthy road shows that IPO contenders typically take on Wall Street.

“Our company does not have to take care of the registration act itself,” said Ingenlath. “It comes naturally from the merger.”

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