US-listed shares of Vietnam electric vehicle (EV) maker VinFast have plunged close to 60% in three days, following a big bang Nasdaq listing that valued the carmaker twice as much as Ford and General Motors.
The cash-burning company is currently valued at $35 billion, down from $85 billion in its Wall Street debut on Tuesday last week.
After ending their debut week with three consecutive days in the red, VinFast shares were up close to 1% in pre-market trade on Monday, but well below their opening price of $22 and a peak of $38.78.
That opening price itself was more than double the $10 per share agreed upon by special purpose acquisition company (SPAC) Black Spade Acquisition, whose merger with VinFast had made way for the listing. That initial valuation was worth far less at $23 billion.
With about 99% of the firm controlled by founder Pham Nhat Vuong, the small amount of publicly available shares makes the stock prone to volatility. On Friday, VinFast shares fell 23% to close at $15.40.
Just $45 million worth of VinFast shares had been traded by late morning on Friday, compared with $29 billion worth of shares in Tesla, Refinitiv data showed.
Vietnam’s first homegrown automaker, VinFast has an ambitious target of selling 50,000 electric vehicles this year.
It plans to shift its sales strategy to boost its presence, with a new “hybrid model” that will bring in distributors and dealers for overseas markets.
Respite unlikely ahead
While US dealers have said they are open to the idea, some analysts remain sceptical.
“It may be hard to successfully market and sell vehicles in the US that are produced and sold in an emerging market like Vietnam, where the features and functionality demanded by consumers are typically very different,” Jason Benowitz, senior portfolio manager at the Roosevelt Investment Group, said.
The company said it intends to raise capital from global investors over the next 18 months, which could further put its lofty valuation at risk.
“Founder Pham Nhat Vuong brought a portion of VinFast to the public markets because he may seek to further monetize his stake over time. That may be a material overhang for VinFast shares for some time to come,” Benowitz said.
VinFast’s listing followed the likes of other EV companies including Faraday Future, Nikola and Lucid, which have come under increased US regulatory scrutiny.
Most have seen their shares tumble after listing. Lucid, which listed with a $24 billion SPAC valuation in 2021, is now valued nearly 40% less at under $15 billion.
- Reuters, with additional editing by Vishakha Saxena