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VinFast Stock Debacle: What Happened and What's Next?

VinFast is a Vietnamese electric vehicle maker that was founded in 2017. The company went public in the United States in August 2022 through a special purpose acquisition company (SPAC) merger. The SPAC merger was valued at $4.4 billion, and VinFast's stock price soared in the weeks following the IPO.

At its peak, VinFast's market capitalization was over $300 billion. This made it one of the most valuable car companies in the world, even though it had only sold a few thousand cars.

The reason for VinFast's meteoric rise was the hype surrounding electric vehicles. Investors were eager to get in on the next big thing, and VinFast seemed to be well-positioned to capitalize on the growing demand for electric cars.

However, VinFast's stock price quickly began to decline. There were a number of reasons for this, including:

  • The global chip shortage: The global chip shortage has made it difficult for automakers to produce their vehicles, and VinFast is no exception. The company has had to cut production and delay deliveries, which has disappointed investors.

  • The ongoing war in Ukraine: The war in Ukraine has also had a negative impact on VinFast. The war has disrupted trade and investment, making it more difficult for VinFast to get the parts and materials it needs to produce its vehicles.

  • The recent sell-off in technology stocks: Investors are becoming more risk-averse, and they are selling off stocks of companies that are seen as being more risky, such as VinFast.

  • VinFast's lack of transparency: The company has not released much information about its financial performance or its plans for the future. This has made it difficult for investors to assess the company's prospects.

  • VinFast's aggressive marketing practices: The company has been accused of making misleading claims about its electric vehicles. This has also hurt the company's reputation.

(VinFast stock has declined 90%+ since the squeeze.)

As a result of these factors, VinFast's stock price has lost over 90% of its value since its peak. The company's market capitalization is now less than $30 billion. The CEO of VinFast, Pham Nhat Vuong, owns 99% of the company's stock. This means that he has lost billions of dollars as a result of the stock decline. However, Vuong is still a very wealthy man, with a net worth estimated to be over $20 billion. At the peak, he was the richest man on the planet for a couple of hours.

It is still too early to say whether VinFast will be able to recover from its stock debacle. The company has said that it is committed to its long-term growth plans, but it will need to address the concerns that have been raised by investors. If VinFast can overcome the challenges it is facing, it could still become a major player in the electric vehicle market. However, the company has a lot of work to do in order to regain the trust of investors.

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