Shares of VinFast Auto Ltd., the electric-vehicle startup, dropped 4.1% to $9.39 on Tuesday, falling well below its $22 listing price when the company made its debut on Nasdaq seven weeks ago. In August, VinFast went public through a special-purpose acquisition company (SPAC) deal, resulting in a market capitalization of $231.3 billion on August 25. However, the market cap of VinFast has now declined to $22.86 billion.
VinFast shares have been experiencing a three-day losing streak, with Monday’s session ending down 21.6% – the largest single-day percentage decline since September 7. The stock is down 90% from its 52-week high of $93 on August 28.
To address the decline in share value, insiders of VinFast have announced plans to sell a portion of their shares. This move comes after heavy withdrawals by investors following the SPAC deal. VinFast, a majority-owned affiliate of Vietnamese conglomerate Vingroup, reported a market capitalization loss of more than $140 billion in less than two weeks.
VinFast has delivered nearly 19,000 electric vehicles (EVs) as of June 30, 2023. However, approximately 99% of the company’s shares are controlled by Vingroup chair and VinFast founder Pham Nhat Vuon, leaving only a small portion available for investors. This limited availability leads to significant fluctuations in the stock price.
In the last reported quarter, VinFast recorded a loss of $500 million and sold over 9,000 EVs globally, generating approximately $315 million in sales. The company is expanding its presence in North America and has begun importing vehicles into the U.S. In July, VinFast started building an electric-vehicle manufacturing facility in North Carolina with a projected capacity of producing 150,000 vehicles annually.
While VinFast initially garnered attention for its high market cap, recent challenges in the stock market have led to a decline in share value. The company’s ability to navigate these obstacles will determine its future success.
Sources:
– Wall Street Journal
– MarketWatch
(Disclaimer: The above information is for informational purposes only and should not be construed as financial advice.)