Polestar A (PSNY) Plunges 13.7% on Reverse Split Fears and Earnings Disappointment – Is the Bottom Near?

Summary
• PSNY trades at $15.78, down 13.72% from its $18.29 previous close
• Intraday range of $15.32–$17.52 highlights volatile session
• Reverse split announcement and Q3 earnings shortfall drive sharp selloff
• 52W low of $15.09 looms as critical support level

Polestar Automotive (PSNY) is in freefall as investors react to a 1:30 reverse split and underwhelming Q3 results. The stock’s 13.7% intraday drop has pushed it perilously close to its 52-week low, with technical indicators and options activity signaling heightened bearish sentiment. As the EV sector braces for regulatory scrutiny and margin pressures, traders are scrambling to position for a potential delisting scenario.

Reverse Split and Earnings Miss Trigger Flight to Safety
The selloff stems from two catalysts: Polestar’s 1:30 reverse split to avoid Nasdaq delisting and its Q3 earnings report failing to meet growth expectations. The reverse split, announced 26 days ago, has been widely criticized as a desperate measure to prop up the stock price. Meanwhile, Q3 revenue of $748M—up from $550M last year—fell short of analyst forecasts, with gross margins contracting amid rising production costs. Analysts at Zacks and Wall Street Zen downgraded the stock to 'Strong Sell,' citing unsustainable financials and weak demand for its EV lineup.

EV Sector Mixed as Tesla (TSLA) Holds Steady
While Polestar’s collapse dominates headlines, the broader EV sector remains fragmented. Tesla (TSLA), the sector’s bellwether, trades flat (-0.06%) despite Polestar’s turmoil, underscoring divergent investor sentiment. Unlike Polestar, Tesla’s Q3 earnings last week showed resilient margins and record deliveries, reinforcing its premium valuation. However, rising interest rates and regulatory headwinds—such as Trump’s relaxed CAFE standards—pose shared risks for EVs, with Polestar’s liquidity crisis amplifying sector-wide caution.

Bearish Options and ETFs in Focus as PSNY Tests Key Levels
• MACD: 1.36 (above signal line 0.22), RSI: 99.01 (overbought), Bollinger Bands: $9.39 (upper), $1.48 (middle), 200D MA: $1.08 (far below price)
• Key Levels: 200D MA at $1.08 (critical support), 52W low at $15.09 (psychological floor), and 30D MA at $1.25 (resistance)
• ETF/Options: No leveraged ETF data available, but options activity suggests aggressive shorting

Top Options Contracts:
• PSNY20251219P14 (Put): Strike $14, Expiry 12/19, IV 27.97%, Leverage 3075.48%, Delta -0.019, Theta -0.0004, Gamma 0.065, Turnover 900
- High leverage and moderate gamma make this put ideal for a 5% downside scenario (projected price $15.00). Payoff: max(0, $15.00 - $14) = $1.00/share
• PSNY20260417C18 (Call): Strike $18, Expiry 4/17/2026, IV 156.04%, Leverage 3.20%, Delta 0.622, Theta -0.0226, Gamma 0.0267, Turnover 11,520
- High IV and moderate delta position this call for a rebound above $18. Payoff: max(0, $18.50 - $18) = $0.50/share if price recovers to $18.50

Action: Aggressive bears should target PSNY20251219P14 for a short-term bet on the 52W low. Bulls may consider PSNY20260417C18 for a longer-term rebound play, but only if the stock stabilizes above $16.50.

Backtest Polestar A Stock Performance
The backtest of PSNY's performance after a -14% intraday plunge from 2022 to now shows mixed results. The 3-Day win rate is 45.33%, the 10-Day win rate is 43.11%, and the 30-Day win rate is 40.89%. However, the returns over these periods are negative, with a -0.91% return over 3 days, a -2.08% return over 10 days, and a -4.70% return over 30 days. The maximum return during the backtest period was -0.26%, which occurred on the 0 day, indicating that the stock did not recover its intraday losses even over the short term.

Bottom-Fishing or Flight to Safety? Watch for $15.09 Breakdown
Polestar’s 13.7% drop has created a high-risk, high-reward scenario. While the 52W low at $15.09 offers a potential short-term floor, the reverse split and Nasdaq compliance risks suggest further downside. Traders should monitor the 200D MA at $1.08 and Tesla’s performance (-0.06% as of 14:49 ET) for sector-wide cues. For now, the PSNY20251219P14 put offers a leveraged hedge against a delisting scenario. If the stock closes below $15.09, the reverse split’s psychological impact could accelerate the selloff.