VinFast stock hits new heights as EV maker leaves experts befuddled and cautious
Tesla. Toyota. VinFast.
VinFast, the Vietnamese electric vehicle startup destined for North Carolina, is currently the world’s third-largest automaker by market capitalization as its blistering Wall Street debut continues to surprise.
At market close Monday, a share of VinFast stock sold for $82.35 a share — up from $22 per share on Aug. 15, its first day as a public company. VinFast currently has a market value above $191 billion. For comparison, the market value of Ford, General Motors, and Honda combined is only $145 billion.
Tesla is the world’s most valuable car company, with a market cap around $750 billion, and Toyota is second with a market cap of approximately $225 billion. Both automakers are profitable and have sold millions of cars. In contrast, VinFast has only delivered tens of thousands of vehicles and still registers steep losses.
On Monday, VinFast was among the market’s most searched and actively traded companies. According to the platform Stock Analysis, it was the day’s top trending company by a wide margin based on page views, attracting more interest than Amazon, Microsoft, Tesla, and Apple.
As of 1:30 p.m. Tuesday, VinFast stock was down 35% on the day, but the company was still the market’s third-most valuable automaker.
Having arrived to the NASDAQ exchange earlier this month after merging with a special purpose acquisition company, or SPAC, VinFast turned heads on its first day as a publicly traded company. Its share price jumped 68% to finish at more than $37 a share, which has since more than doubled.
Financial experts stress context is required to make sense of VinFast’s rising share price.
VinFast is considered a low-float stock, meaning relatively few of its shares are available to be traded. Out of its 2.3 billion shares, the company has made less than 1% open to be bought and sold. This can contribute to volatile price swings.
Financial filings show 99.7% of VinFast shares are owned by Pham Nhat Vuong, the billionaire founder of VinFast’s parent conglomerate Vingroup.
Echos of meme stocks?
Still, the exploding share price has defied expectations.
“EV Stock VinFast is Soaring Again. It Makes No Sense,” read an Aug. 22 headline in the financial news outlet Barron’s.
Formed in 2017, VinFast initially sold scooters and then gas-powered cars in Vietnam before pivoting in late 2021 to sell electric SUVs worldwide. This transition has been bumpy and costly; since 2021, VinFast has recorded net losses of around $4 billion.
As of June 30, it had delivered 19,000 electric vehicles globally, including a few hundred in the United States.
In late July, VinFast began construction on its planned $4 billion manufacturing and assembly plant in southeastern Chatham County. About 30 miles from Raleigh, the site promises to create 7,500 jobs at what would be the carmaker’s first foreign factory.
When it comes to the new stock, several market analysts recommend investors proceed with caution.
“The next big EV stock may be here, and it could be VinFast, but the company has a lot of work to do before it becomes a household name and a stable investment option in the blossoming EV industry,” wrote the financial advice company The Motley Fool on Monday.
“The stock appears to be in meme-territory,” Barron’s also wrote Monday, referencing the collection of so-called meme stocks like GameStop and AMC Entertainment which experienced past price spikes that appeared divorced from any underlying financial success.
But some positive news could be propelling VinFast’s share price upwards: On Aug. 21, the company announced ranges of driving distances on a single battery charge, certified by the Environmental Protection Agency, for its seven-seat model that surpassed initial estimates. At $83,000, the VF9 Eco-version has a range of 330 miles, while a $91,000 Plus-version has a range of 291 miles.
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