Vinfast, Electric Vehicle Producer, Maintains Higher Valuation Than Ford and GM
VinFast, a company that has not yet achieved profitability, concluded its New York debut with shares closing above $37 (£29) each.
This debut granted VinFast a stock market valuation of $85 billion, surpassing the valuations of both Ford at $48 billion and GM at $46 billion.
This development occurs amidst a fierce competition within the automotive industry, with established giants and emerging manufacturers vying for a share of the rapidly expanding Electric Vehicle (EV) market.
VinFast's initial public offering (IPO) resulted in an approximately $39 billion increase in the net worth of the company's founder and chairman, Pham Nhat Vuong, who was already Vietnam's wealthiest individual.
Vuong's control of 99% of the company's outstanding shares, predominantly through Vietnam's leading conglomerate Vingroup JSC, has limited the available shares for trading by other investors, potentially leading to significant price fluctuations.
Trading of VinFast shares on Tuesday was relatively light, with approximately $185 million worth of shares changing hands.
Market experts suggest that investor optimism is driven by the belief that electric vehicles represent the future, and a low-cost East Asian country like Vietnam might emerge as a formidable competitor in the US EV market.
VinFast's unique route to going public involved utilizing a special purpose acquisition company (SPAC), a method often used by start-ups to expedite the process of transitioning a private company to a publicly traded one. Essentially, this involves merging a non-listed company with a listed one.
While some EV manufacturers that employed SPACs, such as Lordstown Motors and Faraday Future, have seen significant declines in their stock value post-merger, VinFast is seen as distinct due to its backing by Vingroup, a proven growth-oriented business entity.
Bill Russo, Founder and CEO of Automobility, stated that VinFast's affiliation with Vingroup provides access to substantial funding, setting it apart from other EV start-ups that often face challenges due to a lack of profitability and sustainable funding.
Despite its unique advantages, VinFast confronts a competitive landscape as established leaders like Tesla and Warren Buffett-backed BYD reduce prices to enhance their sales figures.
In the first half of the year, VinFast delivered approximately 11,300 EVs, while Tesla delivered over 889,000 vehicles during the same period.