Shares of VinFast, the Vietnamese electric vehicle maker that went public in a red-hot Wall Street debut last week, enjoyed another stunning rally again Tuesday.
The stock more than doubled in price in New York, soaring 109% to close at $36.7 as small investors buzzed about the startup automaker. The strong market performance could make it easier for VinFast to raise more money from investors, a move CEO Thuy Le told CNN the company was considering.
A similar story played out last week, when VinFast began trading on the Nasdaq. Its shares surged more than 250%, making it worth more than much larger automakers, at least on paper. The company is now valued at over $85 billion, putting it way above that of industry titans such as Volkswagen or Ford, despite the fact that it produces a relatively tiny number of cars.
Public trading of VinFast (VFS) is based on razor-thin volumes — just 1% of the shares, which means price moves can be extremely volatile. The remaining 99% is controlled by its founder, Pham Nhat Vuong, who is also Vietnam’s richest man. That may change soon, however.
Asked by CNN’s Julia Chatterley on Wednesday whether the company would plan to raise more money or release more shares, Le said: “We continue exploring the opportunities for follow-on transactions, and I anticipate that we should be able to do it in the next few months.”
“Most of the shares will come out of lockup in the next six months to a year as well, so there will be more liquidity on the market.”
Le said her team was excited and “pleasantly surprised by the warm welcome of the market,” adding that “we think the markets recognize our competency.”
In 2022, VinFast sold 24,000 cars globally, a tiny fraction of the deliveries made by the Volkswagen Group and Ford, which sold 8.3 million and 4.2 million, respectively. The 6-year-old company startup is not profitable yet — it posted a loss of $1.4 billion for the nine months through last September — and is still in the early days of scaling a multinational business.
That modest track record doesn’t seem to be deterring stock traders. On Tuesday, VinFast was one of the top trending companies and “most watched” stocks on Stocktwits, a social network for investors. Le noted Tuesday the company had strong backing from its much larger parent, Vingroup, as well as the conglomerate’s billionaire chairman, Pham, who have both committed $2.5 billion.
“That should get us to breakeven and to profitability,” she said.
VinFast has bold global ambitions. In July, it broke ground on a new factory in North Carolina, which it hopes to use as a base for US sales. The company has suffered from a chilly reception there, though, with a wave of recent poor reviews about its electric SUV, the VF 8.
The firm has also teased a European launch, telling shareholders it will enter the region “soon.” On Tuesday, Le reiterated its expansion plans, telling CNN it was eyeing additional launches in Asia and the Middle East. “There is a lot ahead of us,” she said. Asked why the company had decided to compete in the United States, where it squares up against large players such as Tesla (TSLA), Le said it was “exactly” for this reason.
“The US is a very difficult, very challenging market,” she noted. “If we can make it there, we can pretty much build our brand and make it anywhere.”
— CutC by cnn.com
