Polestar stock tumbles after announcing ADS ratio change
Investing.com -- Polestar Automotive Holding UK Plc (NASDAQ:PSNY) stock plunged 12.2% after the electric vehicle manufacturer announced plans to change its American Depositary Shares (ADS) ratio from 1:1 to 1:30.
The company said the ratio change, which will be implemented before the end of 2025, will affect all classes of its ADSs while leaving the underlying ordinary shares unchanged. Under the new structure, each ADS will represent thirty ordinary shares instead of the current one-to-one relationship.
Polestar noted that its Class A ADSs will continue trading on the Nasdaq Global Market under the "PSNY" ticker, while Class C-1 ADSs will remain under "PSNYW." The company stated that the ratio adjustment will not impact any ADS holder’s percentage ownership or voting power, except for those receiving cash from the sale of fractional entitlements.
The EV maker expects the ADS price to increase proportionally following the change, though it cautioned that there is no guarantee the price will be equal to or greater than the current price on a proportionate basis.
Citibank N.A., serving as the depositary bank for Polestar’s ADS program, will aggregate and sell fractional entitlements to new ADSs, with net proceeds distributed to applicable ADS holders.
The company plans to file post-effective amendments to its Form F-6 registration statements with the Securities and Exchange Commission to reflect the upcoming change.
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