Why Polestar (PSNY) Stock Is Rebounding After 13% Plunge

  • Polestar (PSNY) stock is recovering slightly today after slumping 13% yesterday.
  • Polestar is controlled by a Chinese automaker
  • There is renewed optimism that China will ease its coronavirus restrictions soon.
Close up Polestar logo with electric car in store. Polestar (PSNY) is a Swedish automotive brand owned by Volvo Cars and Geely
Source: Robert Way / Shutterstock.com

Polestar (NASDAQ:PSNY) stock slumped 13% yesterday, trending down amid worries about China’s Covid-19 policies and recent protests against the restrictions. Now, though, PSNY stock is rebounding. Slightly in the green as of this writing, shares are recovering as signs emerge that Chinese officials are looking to ease lockdowns and lift vaccination rates.

Polestar is an electric vehicle (EV) company that went public this year. The company is a joint venture between Volvo (OTCMKTS:VLVLY) and Chinese automaker Geely (OTCMKTS:GELYF), which is Volvo’s parent company.

Of course, other companies’ stocks have been dragged down by China’s zero-Covid lockdown initiatives and the recent protests against such measures. For example, both Tesla (NASDAQ:TSLA) and Apple (NASDAQ:AAPL) generate sizeable revenue from China and produce a significant proportion of their products there. Shares of both companies have sunk in recent days.

PSNY Stock: China’s Moves Toward Reopening

Earlier this month, China’s National Health Commission released a “20-point plan” for dealing with Covid-19. Coming after multiple reports that Beijing would ease its measures, the plan did feature some relaxation of quarantine restrictions and other rules.

Additionally, the Chinese government recently noted that 66% of Chinese citizens over the age of 80 have received Covid-19 vaccination booster shots, up from 40% as of Nov. 11. A government official also further emphasized the importance of vaccines today.

Noting that analysts have said increased vaccination rates would enable Beijing to move toward ending lockdowns, CNBC suggests that China’s renewed emphasis on vaccinations is increasing the chances of the country reopening its economy soon.

An Analyst’s Recent View of Polestar

Earlier this month, Citigroup analyst Itay Michaeli placed a “buy” rating on PSNY stock. Michaeli was pleased by the company’s comments about the launch of its new Polestar 3 EV and views several recent metrics positively. The analyst is also upbeat on Polestar’s outlook. He placed a $12 price target on shares.

On the date of publication, Larry Ramer 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.

Article printed from InvestorPlace Media, https://investorplace.com/2022/11/why-polestar-psny-stock-is-rebounding-after-13-plunge/.

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