On its first day of trade, the stock market valuation of VinFast, a Vietnamese electric vehicle (EV) manufacturer, surpassed that of Ford and General Motors (GM).
The company’s shares, which have yet to turn a profit, increased by 255% in their launch on New York’s Nasdaq.
VinFast now has a stock market worth of $85 billion (£67 billion), well exceeding Ford’s and GM’s valuations of $48 billion and $46 billion, respectively.
It comes as automakers of all sizes compete for a piece of the burgeoning EV market.
The listing has increased Pham Nhat Vuong’s net wealth by almost $39 billion.
He started the company in 2017 and was already the richest man in Vietnam.
VinFast went public using a shell company, or special purpose acquisition company (Spac), rather than a traditional share sale.
Spacs are frequently utilized by start-ups to expedite the normally lengthy and costly process of taking a private company public. In layman’s terms, it means combining a company that is not publicly traded with one that is.
In the last three years, several EV manufacturers, notably Lordstown Motors and Faraday Future, have gone public utilizing Spacs.
However, since their mergers, both companies have lost more than 90% of their stock market value.
VinFast faces stiff competition as major firms vie for market dominance.
Market leaders, like as Elon Musk’s Tesla and BYD, which is backed by senior investor Warren Buffett, have been lowering prices to increase sales.
According to a business presentation, VinFast delivered 11,300 EVs in the first half of the year. In comparison, Tesla delivered almost 889,000 automobiles during the same time period.
The company’s revenue decreased 49% year on year in the first three months of the year, and it produced a $598 million net loss. The corporation lost more than $2 billion last year.
