Shares in VinFast Auto, a Vietnamese electric vehicle (EV) maker, which is yet to post a profit, soared above Ford and General Motors after listing on the Nasdaq last week.
On its first day of trading shares in VinFast closed above £29 a share in their New York debut, giving the company a stock market valuation of $85bn, against Ford (valued at $48bn) and General Motors ($46bn).
The company’s majority share owner, controlling 99% of VinFast’s 2.3bn ordinary shares (through Vingroup JSC), is Pham Nhat Vuong, Vietnam’s richest man.
Le Thi Thu Thuy, CEO of VinFast Auto, said the company was changing its distribution model, which had been based on Tesla‘s direct-to-consumer approach, and expected to partner with dealers in overseas markets.
“We are switching to a hybrid model where we have our own showrooms, as well as talking to dealers to open dealer showrooms,” Thuy told Reuters.
In the first half of 2023, VinFast delivered 11,300 EVs and by comparison, Tesla delivered more than 889,000 vehicles in the same period.
In 2022, the company posted a loss of $2.1bn.
“Investors are continuing to believe that the future is in electric and that a low-cost East Asian country will emerge as a competitor in the US,” Bill Russo, CEO of Shanghai-based Automobility, told the BBC.
VinFast Auto went public not through a traditional share offering but via a shell company or Special Purpose Acquisition Company (SPAC).
If traditional IPOs allow companies to raise funds by issuing shares, SPACs do the opposite. Professional investors pool their funds into an empty shell company they have pre-listed on the stock exchange and then go shopping for a business to buy with it. Once the target has been acquired, SPAC investors go looking for shareholders to buy them out (plus their fee) and, in time, the SPAC changes its name to the acquired company and becomes a PLC like any other.
VinFast Auto agreed to merge with SPAC company Black Spade Acquisition Co, founded by casino mogul Lawrence Ho, according to the South China Morning Post.
If VinFast can hold onto its gains, it will be in a unique position given the dismal performance of other EV makers taken public via SPACs, including Lordstown Motors Corp, Nikola Corp and Faraday Future Intelligent Electric Inc, all of which lost more than 90% of their market value since their mergers, the SCMP said.
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