VinFast’s successful stock market entry yields an $85 billion valuation, outpacing legacy automakers and reflecting investor optimism.
VinFast’s debut on the Nasdaq under the symbol VFS marks a substantial market presence.
The company’s market capitalization after the first trading day surpasses that of GM and Ford.
Despite a low-float structure, VinFast’s valuation surge highlights market confidence in its potential.
VinFast, the Vietnamese electric vehicle manufacturer, has achieved a milestone by going public on the Nasdaq Global Select Market using the ticker symbol VFS. Following its merger with Black Spade Acquisition, a special-purpose acquisition company, VinFast’s shares concluded their first trading day at $37.06 in New York, signifying a strong market debut.
As a result of this successful listing, VinFast’s market capitalization has surged to around $85 billion, positioning the company’s value above that of established industry players like General Motors ($45.8 billion) and Ford Motor Company ($47.9 billion). The remarkable growth, marking an over 270 percent increase from the SPAC’s initial public offering (IPO) price, underscores the market’s keen interest in VinFast’s potential and direction.
VinFast’s valuation not only surpasses major automotive giants such as Volkswagen ($69.7 billion) and BMW ($69.4 billion) but also exceeds the collective market capitalization of Ford and Rivian ($67.5 billion). Nonetheless, VinFast remains behind BYD’s market value of $94.3 billion and Tesla’s substantial $730 billion market capitalization.
VinFast’s status as a low-float entity contributes to its market volatility, as a limited number of shares are available for trading. With only 1.3 million SPAC shares remaining after redemptions, the stock’s value may witness rapid fluctuations driven by market dynamics.
The ownership landscape of VinFast is concentrated, with Pham Nhat Vuong, the company’s founder and Vietnam’s wealthiest individual, holding approximately 99 percent of shares, partially through holdings by his wife and Vingroup JSC. This configuration means that a significant portion of shares is not accessible to the general investing public, narrowing the scope of beneficiaries of the stock’s performance.
However, it’s crucial to recognize that the performance of an IPO’s introductory day doesn’t necessarily serve as a reliable indicator of its long-term trajectory. For instance, the case of Nikola, the electric truck startup, is illustrative. Nikola experienced a spectacular IPO surge, with its stock climbing by nearly 104% on the first day of trading in June 2020. However, this euphoric launch did not translate into sustained success. In the months that followed, Nikola’s stock faced a downward spiral, losing more than 75% of its value within three months of its peak. This divergence between IPO introduction performance and subsequent market trends underscores the importance of considering factors beyond the initial trading euphoria when evaluating the long-term prospects of newly public companies.