During its much-anticipated debut on the Nasdaq exchange, shares of VinFast, a prominent Vietnamese electric vehicle manufacturer, surged significantly. This boost came following the finalization of the company’s merger with a special purpose acquisition company (SPAC), marking one of the most significant M&A deals in Asia this year.
The stock’s opening price was $22, an impressive leap of over two-fold compared to the last closing price of VinFast’s partner SPAC, Black Spade Acquisition (BSAQ.A). The merger had valued VinFast at a substantial $23 billion. Notably, at a certain point during Tuesday’s morning session, the stock peaked at $24, briefly elevating the company’s valuation to an astonishing $55 billion. To put this in perspective, this valuation surpassed the market capitalization of Ford, a major player in the automotive industry, which stood at $48 billion.
However, despite the significant price movement, the trading volume remained surprisingly low. In the initial hour after the stock listing, only a mere 0.07% of shares changed hands. This divergence between price movement and trading activity emphasized the cautious approach some investors were taking.
The visionary behind VinFast’s success, Pham Nhat Vuong, Vietnam’s wealthiest individual, demonstrated his commitment by pledging $2.5 billion in April to fortify the electric vehicle manufacturer. This pledge included $1 billion from his personal wealth. Following the merger, Vuong became the beneficial owner of an impressive 99% of the 2.3 billion ordinary shares of VinFast, all of which were held through his flagship company and its affiliates.
VinFast’s entrance into the Nasdaq via the SPAC route aligns with a trend observed among several other electric vehicle manufacturers. However, such SPAC listings have recently faced increased scrutiny from both investors and regulatory bodies, especially given the intensifying competition within the electric vehicle market.
In a comparison with its competitors who chose similar SPAC listings, VinFast’s performance appeared promising. While some rivals like Nikola Corp and Lucid experienced significant valuation drops post-listing, VinFast’s trajectory seemed more positive. Nikola’s market value plummeted from $13.9 billion to $1.4 billion, and Lucid saw its value decline from $24 billion during the SPAC deal to $15.5 billion. In contrast, electric vehicle manufacturers that did not opt for SPAC listings, such as Tesla and Rivian, demonstrated better stock performance.
VinFast, a subsidiary of Vietnam’s leading conglomerate Vingroup, has received substantial investments totaling $9.3 billion from Vuong, Vingroup, and affiliated entities, as stated in a filing from June. The company’s strategic plans include the construction of a $4 billion production facility in North Carolina and the expansion of its car shipments from its Vietnamese factory to the United States, its primary overseas market.
While VinFast has already delivered nearly 3,000 units to the United States since March, actual sales figures have not been publicly disclosed. However, industry sources suggest that the company sold only 137 vehicles in the United States through June, according to S&P Global Mobility data.
Earlier in the year, VinFast made the decision to forgo a $2 billion ordinary listing in favor of pursuing the SPAC merger. This move seemed to align better with the company’s growth strategy and investor sentiment.
The SPAC merger had seen over 80% of Black Spade Acquisition’s investors cash out their shares, resulting in only about $14 million remaining in the company’s trust, according to public records. VinFast’s financial performance in recent periods has been mixed, with a 49% drop in first-quarter revenue compared to the previous year and a net loss of $598 million. The company’s financials for 2022 also reported a loss of $2.1 billion, indicating that it has yet to achieve profitability.