BANGKOK, THAILAND – 2023/05/18: VinFast displays its vehicles at Future Energy Asia Exhibition 2023 at Queen Sirikit National Convention Center.
Nathalie Jamois | Lightrocket | Getty Images
VinFast’s shares jumped after its U.S. trading debut, vaulting its total market value past some of the world’s largest automakers similar to Ford, GM, BMW and Volkswagen.
On Tuesday, the Vietnamese electric vehicle maker listed on Nasdaq following the completion of its merger with the U.S.-listed special purpose acquisition company Black Spade Acquisition. A SPAC is a shell company that raises capital through an initial public offering for the purpose of acquiring an existing operating company.
Shares of VinFast closed at $37.06 on Tuesday — 270% higher than Black Spade Acquisition’s IPO price of $10 and 68% higher than its Tuesday opening price of $22. Black Spade Acquisition went public in 2021.
VinFast shares were down 10% ahead of the open Wednesday.
Following the market debut, VinFast is now currently worth $85 billion, in line with CNBC calculations. The SPAC merger previously valued VinFast at roughly $23 billion, in line with a June filing with U.S. securities regulator.
Meanwhile, BMW and Volkswagen are each worth around $69 billion, in line with Refinitiv data, with Ford at $48 billion and GM at $46 billion.
By market capitalization, Tesla is still the world’s largest automaker at $739 billion and Chinese rival BYD is fourth place with a $93 billion valuation.
VinFast is the automaking unit of Vietnamese conglomerate Vingroup and was founded in 2017.
SPAC is ‘only a way for us to get listed’
Analysts have previously said that SPAC shares are extremely volatile attributable to their speculative nature. Resulting from macroeconomic headwinds, many sponsors have been forced to scrap their proposed deals, sometimes even before the SPACs have been listed.
“We were able to do a conventional IPO. We pursued the path for nearly two years but the markets have been difficult so we decided to decouple the listing from the fundraising. We got the financial backing from our parent company and we went ahead with the listing by way of SPAC,” said VinFast CEO Lê Thị Thu Thủy, in a CNBC interview on Tuesday.
In response to Vingroup, VinFast received a $2.5 billion boost in April from Vingroup and Vingroup’s chairman, Pham Nhat Vuong, to fund its global expansion.
When asked about the firm’s decision to list via a SPAC in unfavorable market conditions, Lê said that it was “only a way” to get listed.
“You saw how the market reacted once we opened today, right? I believe it’s only a way for us to get listed in the U.S. We didn’t think of the repute of SPACs,” said Lê.
VinFast’s U.S. expansion has faced hurdles, including delayed deliveries to its first customers attributable to a software issue.
The corporate, which has yet to make a profit, eventually delivered those vehicles to its first U.S. buyers in March, a number of months after its December goal.
VinFast is constructing a factory in North Carolina to compete with EV makers Tesla and BYD in the U.S. market, in addition to traditional automakers increasingly specializing in hybrids and EVs. The automaker said that the facility can produce as much as 150,000 vehicles a 12 months in the first phase.
The factory is expected to start out operations in 2025 — a 12 months later than its initial goal of 2024.
In response to how VinFast plans to compete with the big players in a competitive market like the U.S., Lê said that there is enough market share for every player.
“[With] the whole world and U.S. specifically moving from internal combustion engines to EVs, there’s room for everyone.”
Clarification: The text of this story has been updated to stipulate that the 270% rise was from Black Spade Acquisition’s IPO price.