In just its first 24 hours of trading, VinFast (NASDAQ:VFS) stock surpassed the likes of Ford (NYSE:F), General Motors (NYSE:GM), and BMW (OTCMKTS:BMWYY) by market capitalization. Indeed, the Vietnamese electric vehicle (EV) maker virtually leaped past the competition in its first-ever U.S. trading debut on the Nasdaq earlier this week.
On Tuesday VinFast went public via a special purpose acquisition company (SPAC) merger with Black Spade Acquisition. If you recall, a SPAC refers to a “blank check” company that raises capital in its own initial public offering (IPO) for the purpose of eventually merging with an existing company, taking it public in the process. It’s a far quicker and more streamlined method of going public compared to traditional IPOs. As such, SPAC mergers have become increasingly common occurrences on Wall Street, especially with EV makers.
By the end of the day Tuesday, VinFast jumped from Black Spade’s $10 IPO price to more than $37 per share, a 270% increase and more than 68% higher than VFS’s opening price of $22.
As a result, VinFast is now evaluated at $85 billion, beyond the likes of BMW and Volkswagen (OTCMKTS:VWAGY), each worth about $69 billion, as well as Ford and GM, valued at $48 billion and $46 billion, respectively.
VFS Stock Shows Volatility in Early Trading
Despite VinFast’s historic U.S. stock market debut, at the time of writing, VFS stock is well in the red, down about 18%. Reasonably so, as SPAC-based IPOs have grown an infamous reputation for earning barrels of early investor attention that eventually wains, along with the inflated stock price.
According to VinFast Chief Executive Lê Thị Thu Thủy, the SPAC merger was little more than the easiest way to go public.
“You saw how the market reacted when we opened today, right? I think it’s just a way for us to get listed in the U.S. We didn’t think of the reputation of SPACs,” said Lê.
VinFast represents yet another new player in the increasingly jam-packed field of high-growth, publicly-traded EV makers. The company is currently in the process of building a factory in North Carolina, a facility stated to be able to produce 150,000 vehicles a year in the first phase of operations.
According to Lê, however, everyone can still secure their piece of the pie.
″[With] the whole world and U.S. in particular moving from internal combustion engines to EVs, there’s room for everybody,” Lê told CNBC.
On the date of publication, Shrey Dua did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
