'Vinfast A Vietnamese electric car maker that is beating out General Motors and Ford
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Vietnam's electric car maker Vinfast stock market price has been higher than leading American carmakers Ford and General Motors (GM) on the first day of trading.
The company has yet to turn a profit, but its share price has seen highs since its New York listing. The price of a share closed at more than 37 US dollars.
Based on the first day's performance, 'Vinfast stock market valuation has been pegged at $85 billion, much higher than Ford's $48 billion and General Motors' $46 billion.
This comes at a time when major automakers are fighting for their share of profits in the booming electric vehicle market.
The listing on the stock market has boosted 'Vinfast's chairman and founder Pham Nhat Wong's fortune by about $39 billion. He is already the richest man in Vietnam.
Pham Nhat Wong owns 99% of the company and manages it through Win Group JSC.
Thus it limits the number of shares available to other investors which can lead to large price swings.
Trading in 'Vinfast shares was relatively light on Tuesday, with about $185 million worth of shares being bought and sold.
"Investors are confident that the future is electric (vehicles) and a low-cost East Asian country as a competitor to the US," says Bill Russo, founder and CEO of Shanghai-based AutoMobility. but will arise.'
Vietnam instead of China
According to market experts, looking at the geopolitics, Vietnam will be the country that will take the lead in this work instead of China.
Instead of a traditional share sale, 'Vinfast offered its shares to the public using a shell or special purpose company (SPEC).
Specs are typically used by startup companies to speed up the often slow and expensive process of taking a private company public. Simply put, it means merging a company into a company that is listed on a stock exchange.
Several electric vehicle manufacturers, including Lordstown Motors and Faraday Future, have gone public using the specs in the past three years.
Yet, after the merger, the stock market values of both firms have fallen by more than 90%.
"Vinfast scenario may be different because it is principally supported by the Win Group, giving it access to investment from businesses with a demonstrated history of development," Mr. Russo said.
According to him, the majority of EV businesses fail because they exhaust both internal and external sources of lucrative finance too quickly.
But sophistication also faces stiff competition as major players vie for market dominance.
Veteran investor market leaders like Elon Musk's Tesla and Warren Buffett-backed BYD are cutting prices to boost sales.
According to a corporate filing, Vinfast delivered 11,300 electric vehicles in the first half of this year. In contrast, Tesla shipped more than 889,000 cars within the same time frame.
Although there will be many more winners, Dan Ives of Wedbush Securities predicted that Tesla will be the undisputed leader in the EV market.
'Vinfast has laid a solid foundation for EV success.'
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