Polestar (NASDAQ:PSNY) stock is in the spotlight today amid mounting delisting fears and a recent $10.1 million order. Polestar operates as a joint venture between Volvo (OTCMKTS:VLVLY) and Geely (OTCMKTS:GELYF), a Chinese automobile company. In 2010, Geely acquired Volvo for $1.8 billion. As a result, Polestar has a heavy China-based background. That’s where delisting concerns come into play.
Today, three state-owned Chinese companies announced they will voluntarily delist shares from U.S. exchanges. The three companies are China Life Insurance (NYSE:LFC), China Petroleum and Chemical (NYSE:SNP) and PetroChina (OTCMKTS:PCCYF). An official from China’s Securities Regulatory Commission said this move is just a business decision:
“Listings and delistings are both common in capital markets. According to these companies’ announcements, they have strictly observed relevant U.S. rules and regulations since listed on the U.S. markets, and the delisting decisions are made out of their business considerations.”
This departure comes as tensions between the U.S. and China rise due to Taiwan independence issues and scrutiny of company audits. All three of these companies had been previously placed on the Holding Foreign Companies Accountable Act (HFCAA) list. Polestar is not currently on the list.
What’s Going on With PSNY Stock Today?
The HFCAA states that foreign companies trading on U.S. exchanges must submit audited financial filings to U.S. regulators. If these audited filings are not received for three consecutive years, then a given company may be at risk of being delisted. The earliest any company can be delisted over HFCAA noncompliance is 2024.
While Polestar does have Chinese ownership, its headquarters are located in Sweden. As a result, U.S. auditors may be able to gain filings from the company more easily than if Polestar was based in China.
On a brighter note, Polestar also recently received a $10.1 million vehicle order from Autonomy, an electric vehicle (EV) subscription company. The order is for 200 Polestar 2 models at an average cost of $50,500 per vehicle. Autonomy also recently ordered vehicles from Tesla (NASDAQ:TSLA) and Ford (NYSE:F), among others. Using Autonomy, customers can own an EV through a subscription service instead of buying one outright.
This week, Polestar announced that Feng Dan will replace Nathan Forshaw as President of Polestar China as well. Dan previously worked at SAIC-GM, a joint venture between SAIC and General Motors (NYSE:GM). He has 25-plus years of automotive industry experience.
“With the release of Polestar 3 and subsequent luxury pure electric models, we will continue to provide Chinese users with luxury products and Service experience,” said Dan in regard to the news. “I look forward to leading the Polestar China team to deepen the Chinese market and further contribute to the global success of Polestar.”
On the date of publication, Eddie Pan did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.