Shares of VinFast (NASDAQ:VFS) stock are sliding lower by about 5% today, bringing their five-day loss to over 25%.
On Monday, the Vietnamese electric vehicle (EV) company filed a prospectus documenting the sale of up to 75.75 million shares. 3.67 million of those shares are issuable upon the exercise of 3.67 million warrants. Each warrant allows the holder to purchase one share of VFS stock at a price of $11.50 per share, which is higher than the current price. Assuming that these warrants are exercised for cash, VinFast would receive $42.43 million of proceeds. The remaining 72.08 million shares can be sold by existing stockholders, which represents 3.1% of outstanding shares as of Sept. 20.
VinFast had this to say about the sale:
“Based on the last reported sale price of our ordinary shares on September 20, 2023, the sale of 46,293,461 Released Shares by the Company Selling Security holders would result in proceeds of $795,784,595 to us, which would be provided to us in relation to the Capital Funding Agreement, without taking into account sales commissions, fees, brokerages, taxes and other related expenses.”
VFS Stock: VinFast Files to Sell Up to 75.75 Million Shares
“Company selling stockholders” are eligible to sell up to 46.29 million shares, the largest share count within the prospectus. These company stockholders received these shares at prices between 1.05 cents and $13.05. When not accounting for these shares, “Company Initial Shareholders” own 2.25 billion shares of VFS stock, equivalent to 96.6% of outstanding shares. These shares are still subject to lock-up restrictions.
Prior to the filing of the prospectus, there were 2.32 billion shares issued and outstanding, which assumes that warrants are not exercised. According to Yahoo Finance, the float for VFS is only 32.18 million shares. This means that the release of 75.75 million shares could have a significant effect on VinFast’s price.
Meanwhile, VinFast is set to release its third-quarter earnings before the market opens on Oct. 5. During the second quarter, the company delivered 9,535 EVs and 10,182 electric scooters. That’s comparable with 1,780 EV deliveries and 9,757 e-scooter deliveries during the first quarter. Revenue tallied in at $334.1 million, up by 131.2% year-over-year, of which $314.6 million was attributed to vehicle sales. Still, VinFast remains highly unprofitable, reporting a gross loss of $114.1 million.
On the date of publication, Eddie Pan 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.
