VinFast Auto, a Vietnamese electric vehicle (EV) manufacturer, saw its stock surge 35% at one point during Monday's trading session, hitting an all-time high of $93 per share. This brought its in-session market capitalization to roughly $216 billion. The stock closed the day up 19.75% at $82.35, marking its sixth consecutive day of gains and a record close with a market value surpassing $190 billion.
VinFast's rapid ascent has dwarfed the market caps of many long-established companies. In comparison, its market cap surpassed half of the firms in the Dow Jones Industrial Average. Boeing's market value stands at around $140 billion, while Goldman Sachs is approximately $107 billion. The speed at which VinFast crossed the $200 billion threshold surpassed hot stocks like Tesla and NVIDIA. Tesla took 3,600 trading days to reach this market cap, while AI darling NVIDIA needed over 7,700 trading days.
On August 15, VinFast went public on the NASDAQ via a merger with the special purpose acquisition company (SPAC) Black Spade Acquisition. The stock soared that day, touching a high of $38.78 before closing at $37.06, an impressive jump of 254.64%.
Since then, VinFast's stock has experienced roller-coaster-like volatility. This fluctuation was expected, given that Pham Nhat Vuong, VinFast's Chairman and founder, controls 99% of VinFast's shares through his conglomerate, Vingroup JSC, leaving only a small portion available for trading. This scarcity can result in significant price swings even with relatively small trading volumes.
Media citing data from Vanda Research noted a resurgence of retail interest in VinFast over the past week. Retail investors previously propelled EV makers like Nikola and Rivian to lofty valuations.
Trading in options for VinFast shares started on Monday, allowing traders to leverage their bets on the stock's ascent. The most active options in the market were the $100 call options for VinFast, set to expire on September 15.
This frenzy around VinFast's stock comes even as the broader U.S. stock market shows signs of cooling down, hinting at continued market exuberance. Some analysts point out that the S&P 500 has only retreated about 4% from its summer highs, not enough to induce significant investor fear. The index would need to fall around 10% to truly instill a sense of panic.
Established in 2017, VinFast is a subsidiary of Vingroup, one of Vietnam's largest listed companies. Since its inception, VinFast has been regarded as the hope of Vietnam's national auto industry. The company's founder, Vietnam's richest man, has openly expressed aspirations to rival Tesla. However, the company's performance to date has been underwhelming. Recent data indicates declining revenues and widening losses. VinFast has also been plagued by poor product reviews and operational challenges.
To date, VinFast has exported roughly 2,100 EVs to the U.S. and nearly 800 to Canada. Its expected sales for the entire year are less than what General Motors sells in a week.
Shorting VinFast might seem logical given these factors, but analysts have warned that this could be a risky endeavor. Shorting a stock with limited liquidity can sometimes incur interest costs exceeding 100% annually.
