In yet another volatile day of trade, shares of Vietnam electric vehicle (EV) maker VinFast jumped a whopping 109% on Tuesday to reach a market valuation of close to $90 billion — four times that of the SPAC deal it reached for the US listing.
The moves followed reports that South Korea’s Star Group Industrial, which supplies magnets to VinFast and Korea’s Hyundai Motor, is investing $80 million in a new factory in Vietnam, as part of “counter-measures” against possible Chinese trade restrictions.
Last Tuesday, the cash-burning company soared as it started trading on Nasdaq with an opening price of $22 following its tie-up with SPAC partner Black Spade Acquisition. The SPAC deal valued VinFast at near $23 billion, with each prices about $10.
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Yesterday, VinFast stock traded as high as $46.98 before paring some gains to close at $36.72.
With 99% of the EV firm controlled by founder Pham Nhat Vuong, the tiny amount of publicly available shares has made the stock prone to volatility. It has jumped or slumped 14% or more every day over the past six sessions.
VinFast stock ended last week eroding almost 60% of its debut gains, reaching a share price of just over $15.
The stock was the second highest on trading website Stocktwits “Trending” list on Tuesday, suggesting it has attracted the interest of individual investors.
About $428 million worth of VinFast’s shares had been traded as of mid-day, compared to Tesla’s turnover of over $17 billion.
Having sold just about 11,300 EVs in the first half of 2023, VinFast’s current share price is trading at about 47 times its sales for the year, Barron’s reported.
The US investment advisor said VinFast stock was too expensive at its current price, and was likely to trade lower in the coming months.
US EV companies, including Faraday Future, Nikola and Lucid, which also saw massive early gains after SPAC listings, have seen their shares subsequently slump, triggering increased US regulatory scrutiny.
Lucid, which listed with a $24 billion SPAC valuation in 2021, is now valued nearly 40% less at under $15 billion.
- Reuters, with additional inputs from Vishakha Saxena
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