Vietnamese Automaker VinFast Debuts On Nasdaq With Valuation Higher Than BMW, Ford, GM
VinFast Auto Ltd. (Nasdaq: VFS), a Vietnamese electric-vehicle manufacturer, has taken the market by storm with its public debut, propelling its market capitalization to exceed that of industry giants General Motors Co., Ford Motor Co., and BMW. Traders eagerly embraced shares of VinFast as they surged in value, marking a significant milestone for the company’s SPAC-driven initial public offering.
Following its entry into the public market via a SPAC arrangement, VinFast’s valuation has surged to approximately $85 billion, a substantial increase driven by its shares’ impressive performance. The stock reached $38.78 on the New York-based Nasdaq Global Select Market, representing an astounding uptick of over 270% from the SPAC’s IPO price. This surge in value also represents more than a tripling of the initial deal’s implied equity value of $23 billion.
VinFast made its much-anticipated debut under the ticker symbol VFS on the Nasdaq Global Select Market. The company’s entrance was met with a flurry of trading activity and intermittent volatility halts. The remarkable 255% surge from the SPAC’s closing price on the previous day has solidified VinFast’s position as the standout performer among de-SPACs making their US exchange debut this year.
The staggering valuation achieved by VinFast has now positioned it with a market value surpassing that of BMW AG. Furthermore, when combined on paper, VinFast now holds a greater market capitalization than both Ford and Rivian Automotive Inc., though it trails behind BYD Co Ltd in terms of market value.
However, it’s essential to recognize that VinFast operates as a low-float company, meaning a limited number of shares are available for trading. With only 1.3 million shares of the SPAC remaining after redemptions, the stock’s value and movements are susceptible to significant fluctuations.
Notably, regulatory filings unveil that Pham Nhat Vuong, the wealthiest individual in Vietnam and the founder of VinFast, retains control of approximately 99% of the company. This control is partially attributed to shares held by Vuong’s wife and Vingroup JSC. As a result, the majority of VinFast’s shares remain locked and inaccessible to investors who could have benefited from the substantial rally on Tuesday.
But initial market performance isn’t indicative of the company’s prospect, as historical performance of companies merging with blank check firms would indicate. Often, the initial excitement and social media attention following a deal’s closure may lead to subsequent rallies that eventually taper off. This trend has been observed as de-SPACs that debuted this year have experienced a median decline of around 45%. Alarmingly, 18 of these companies have witnessed a decline of over 70% in their value post-debut, based on data compiled by Bloomberg.
VinFast last traded at $26.00 on the Nasdaq.
Information for this briefing was found via Bloomberg and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
