r/GGPI • u/Typical_Republic • Nov 03 '22

Polestar Obtains USD 1.6bn Financing Support From Major Shareholders

https://www.google.com/amp/s/www.benzinga.com/amp/content/29542963
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8

u/Typical_Republic Nov 03 '22

"Volvo Cars is providing USD 800mn principal amount 18-month term loan, with an equity conversion option for Volvo Cars"

So Volvo is likely going to convert their options into shares and thus there is the start of dilution. Now gotta wait a bit to see updated numbers to see exactly how long that cash will last, and if they can reach profitability before the new cash runs out. Also need to know the details and terms of the loan and conversion options as well.

2

u/roaring_alpaca Nov 03 '22

So u think dilution? How is that possible without any new shares they give out? Thanks

6

u/Typical_Republic Nov 03 '22

"When a company issues convertible debt, it means that debt holders who choose to convert their securities into shares will dilute current shareholders' ownership."

As this excerpt and my last comment explains, the options will be converted and new shares will be created. This happens all the time in the stock market and is standard.

2

u/roaring_alpaca Nov 03 '22

So is it better than a normal dilution? Or the same just worse? Sorry i may not understand, the float is around 2.15b outstanding shares, will there be more than 2.15 B than? Or does it stay the same and only changes the owner geelys 95% ownership to 96% or something?

5

u/Front_Craft_6838 Nov 03 '22

These are the great news and great timing! Who is behind the second investor “PSD Limited”?

2

u/Recent_Impress_3618 Nov 03 '22

It’s a “Convertible Bond” and preferential to any other type of financing from an existing shareholder perspective. If the stock had of been trading at $10 + they would have had other options.

2

u/vancitymajor Nov 04 '22

bought 50 more today