Unraveling the Mystery Behind VinFast’s Stock Performance
VinFast, a prominent Vietnamese electric vehicle manufacturer, has been making headlines with its recent stock performance. In a rollercoaster week, shares of the company observed dramatic fluctuations, particularly a notable 300% rise. But what’s behind VinFast’s stock performance, and is this sudden growth sustainable?
VinFast’s Meteoric Rise
VinFast’s stock began the week with a bang, observing a significant 25% increase in its premarket trading value, positioning each share at approximately $90. This unprecedented surge allowed VinFast to boast a market capitalization surpassing the $150 billion mark, making it more valuable than established U.S. automakers like Ford and General Motors.
Float and Ownership Dynamics
One unique aspect of VinFast’s stock performance is its small float. The lion’s share, or 99%, of its shares is under the control of founder Pham Nhat Vuong. Given that VinFast’s public debut consisted of only 16 million publicly traded shares and it has maintained a daily trading average of over 8 million shares, it’s clear that investor speculation and hype are significant contributors to its current valuation, rather than its fundamentals.
VinFast’s Financial Snapshot
In the fiscal year 2022, VinFast reported the delivery of approximately 24,000 electric vehicles, amassing revenue of $634 million. However, it also faced a considerable loss amounting to $2 billion. When compared to fellow electric vehicle startups, such as Rivian, VinFast’s stock performance translates to a price-to-sales ratio of 250x, which is remarkably high.
Future Projections and Investments
VinFast is not resting on its laurels. The company has ambitious plans for the upcoming year, setting a target of producing 50,000 vehicles in 2023. Additionally, a $4 billion investment is in the pipeline for a brand-new factory in the U.S. Despite these promising ventures, VinFast’s current financial standing and sales don’t necessarily validate its $150 billion+ valuation.
Week’s Outlook
Given VinFast’s stock performance and its minimal float, it’s entirely plausible that the company’s shares might experience a decline as abrupt as its recent upswing. This potential volatility can be attributed to shifts in investor sentiment. As such, potential investors should tread carefully, keeping in mind that VinFast’s business fundamentals may not align with the prevailing market excitement.
For more information about VinFast’s story, explore it on their official website.
