Vinfast’s Stock Market Debut Outshines Ford And GM Valuations

Vietnamese electric vehicle (EV) manufacturer VinFast has made a remarkable stock market entrance, surpassing valuations of global giants Ford and General Motors (GM) on its first trading day.

Despite being yet to turn a profit, VinFast’s shares closed above Sh5,326 ($37) each during its debut on Nasdaq, catapulting its market valuation to Sh12.24 trillion ($85 billion).

This valuation significantly exceeds Ford’s Sh7 trillion ($48 billion) and GM’s Sh6.6 billion ($46 billion), reflecting the competitive environment as established and emerging carmakers vie for a share of the thriving EV market.

VinFast‘s listing resulted in an impressive boost of approximately Sh5.6 trillion to the wealth of its founder and chairman, Pham Nhat Vuong, already the wealthiest individual in Vietnam.

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Regulatory disclosures reveal that Vuong holds control over 99% of the company’s outstanding shares, primarily through Vingroup JSC, Vietnam’s largest conglomerate.

However, the concentration of ownership may lead to substantial price fluctuations due to limited shares available for trading.

The initial trading session for VinFast’s stock showcased relatively modest activity, with approximately $185 million worth of shares exchanged.

Industry analysts believe this strong market response demonstrates investor belief in the potential of electric vehicles and the potential for emerging economies, such as Vietnam, to compete in the EV market against established players.

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Innovatively, VinFast pursued a listing through a special purpose acquisition company (Spac), avoiding a conventional share sale.

Spacs expedite the process of taking a private entity public by merging with a publicly traded company. VinFast’s approach differs from other EV manufacturers that have taken this route, such as Lordstown Motors and Faraday Future, both of which saw substantial declines in stock value post-merger.

VinFast’s unique positioning is attributed to its backing by Vingroup, a company with a proven growth trajectory, which offers a strong financial foundation.

While the EV market remains intensely competitive, with Tesla and BYD leading the pack, analysts note that VinFast has established a solid groundwork for success in the EV domain, with projections for a promising future.