Polestar A Plummets 27%: A Perfect Storm of Analyst Downgrades and Market Sentiment Sparks Investor Alarm

Summary
• Polestar A (PSNY) slumps 27.23% intraday, hitting a 52-week low of $13.05
• Analysts pile on with 'Sell' ratings, including Zacks and Wall Street Zen
• Company announces 1-for-30 reverse split effective Dec 30
• Options volatility surges, with 142% implied volatility on $13 puts

Today’s collapse in Polestar A marks one of the most dramatic intraday declines in the EV sector, driven by a cascade of bearish catalysts. The stock opened at $17.37 but cratered to $13.05, a 27.23% drop, amid relentless selling pressure. Analyst downgrades, a reverse split, and deteriorating fundamentals have ignited a liquidity crisis, with turnover hitting 742,078 shares. The 52-week low of $13.05 now looms as a critical psychological threshold.

Analyst Downgrades and Reverse Split Trigger Sharp Selloff
The collapse in PSNY is a direct consequence of a perfect storm: analyst downgrades, a reverse split, and deteriorating fundamentals. Zacks Research and Wall Street Zen both downgraded the stock to 'Strong Sell' and 'Sell' within weeks, while Weiss Ratings reaffirmed its 'Sell' rating. The 1-for-30 reverse split, announced on Nov 17, has further eroded investor confidence, signaling desperation to stabilize the share price. Compounding these issues, Polestar’s 52-week low of $13.05 aligns with its 200-day moving average of $1.08, creating a technical and psychological convergence point for sellers.

EV Sector Volatility Intensifies as Tesla Holds Steady
While Polestar A’s collapse is extreme, the broader EV sector remains volatile. Tesla (TSLA), the sector’s bellwether, rose 0.17% intraday, highlighting divergent investor sentiment. Polestar’s struggles reflect its niche positioning and lack of profitability, whereas Tesla’s recent earnings and product pipeline have bolstered its resilience. The S&P 500’s 16.38% YTD return contrasts sharply with Polestar’s -34.09% decline, underscoring the stock’s structural challenges.

Bearish Options and ETFs: Capitalizing on the Freefall
• MACD: 1.36 (above signal line 0.22), RSI: 99.01 (overbought), Bollinger Bands: Wide range (Upper $9.39, Lower -$6.44)
• 200-day MA: $1.08 (below current price), 50-day MA: $22.51 (far above)

The technical picture is bearish, with RSI at extreme overbought levels and MACD diverging from price action. Key support levels at $13.05 (52-week low) and $14.10 (recent intraday low) are critical. The 1-for-30 reverse split on Dec 30 could trigger further volatility. For options, focus on high-leverage puts with moderate delta and high gamma:

• PSNY20251219P13 (Put, $13 strike, Dec 19 expiry):
- IV: 142.14% (extreme volatility)
- Leverage: 12.18% (high)
- Delta: -0.416 (moderate bearish exposure)
- Gamma: 0.1249 (high sensitivity to price moves)
- Turnover: 218 (liquid)
- Theta: -0.0333 (rapid time decay)
- Payoff (5% downside): $0.665 per share (max gain if price drops to $12.64)
This contract offers explosive potential if Polestar breaks below $13.05, with high gamma amplifying gains as the stock declines.

• PSNY20260116P13 (Put, $13 strike, Jan 16 expiry):
- IV: 122.97% (high volatility)
- Leverage: 6.99% (moderate)
- Delta: -0.397 (moderate bearish exposure)
- Gamma: 0.0732 (strong sensitivity)
- Turnover: 410 (liquid)
- Theta: -0.0188 (moderate time decay)
- Payoff (5% downside): $0.665 per share (same as above)
This longer-dated put provides more time for the selloff to materialize, with lower theta decay and comparable leverage.

Action: Aggressive bears should prioritize PSNY20251219P13 for short-term gains, while PSNY20260116P13 offers a safer, time-insensitive bet. Both contracts thrive in a 5%+ downside scenario.

Backtest Polestar A Stock Performance
The backtest of PSNY's performance after a -27% intraday plunge from 2022 to now shows mixed results. The 3-Day win rate is 45.31%, the 10-Day win rate is 42.41%, and the 30-Day win rate is 42.19%. However, the overall returns over these periods are negative, with a -0.56% return in 3 days, a -1.18% return in 10 days, and a -0.93% return in 30 days. The maximum return during the backtest was only 0.10%, which occurred on the 30th day, suggesting that the stock has struggled to recover from the intraday plunge.

Polestar’s Freefall: Reverse Split and Analyst Sentiment Signal a Pivotal Moment
Polestar’s 27% intraday collapse is a watershed moment, driven by analyst downgrades, a reverse split, and deteriorating technicals. The 52-week low of $13.05 and 1-for-30 reverse split on Dec 30 will test investor resolve. While Tesla’s 0.17% gain highlights sector divergence, Polestar’s structural challenges—negative P/E, high beta, and a 31% YTD decline—suggest further pain. Investors should monitor the $13.05 support level and the reverse split’s market reaction. For now, bearish options like PSNY20251219P13 offer high-reward opportunities in a stock primed for volatility.