Meet The Vietnamese EV Maker Surpassing Ford

After listing on the NYSE this week, the market cap of VinFast hit $85bn, well above Ford ($48bn). Yet something's wrong.

Just when you thought the hype around SPAC’s, electric vehicle listings and emerging markets was a thing of the past, this week gave us a bit of a surprise.

Since 2021, Black Spade Acquisition (BSAQ) has been listed as a Special Purpose Acquisition Company (SPAC). As a “blank cheque” firm, it can raise money and then go off and reverse merge with another business.

On Monday, this happened with VinFast Auto Ltd., taking the business public. It’ll now be trading under the ticker VFS.

We won’t dive into all the details of how SPAC’s work, but if you want to know then we’d suggest reading this explainer here. In the meantime, here’s a picture of Black Spade and VinFast exec’s looking rather smug at the deal…

On Tuesday, the share price traded up to $37, and even though the price has settled around $30 since then, the market value assigned to the EV company is significantly higher than other car manufacturers:

VinFast - $85bn

Stellantis - $53bn

Ford - $48bn

General Motors - $46bn

Where do we begin

There are plenty of reasons why we don’t feel VinFast is a viable player in this space and why we think the share price could tumble going forward.

To begin with, note the actual free float of VinFast. 7 million shares are out, but this represents just a slither of the overall share ownership. Pham Nhat Vuong (the billionaire owner) still controls 99% of the business.

With such a limited amount of the company able to be freely traded, this is a large factor that is bidding up the value of the firm. We’d argue that this isn’t representative of the true value, as traders are scrambling to own the stock with such small quantity.

In the rest of the article, we’ll go into…

• The rags to riches story of Mr Vuong

• Why the VinFast $2.1bn loss can’t be glossed over

• Why Vietnam does have a unique advantage for car production

• How to trade EV stocks for the rest of the year