- Wednesday, October 16, 2024
Investing in VinFast Auto, the Vietnamese electric-vehicle maker, has been a rollercoaster of emotions for investors. In an unexpected move, the stock experienced a significant drop on Wednesday, leaving traders puzzled.
Trading at $8.15 per share in the afternoon, VinFast (ticker: VFS) saw a 12% decline, while the S&P 500 and Nasdaq Composite registered gains of 0.3% and 0.8% respectively.
The stock's volatility, coupled with a lack of fundamental news, is not a new phenomenon. Surprisingly, on August 28, VinFast's stock surged to $93 per share shortly after the completion of its merger with a special-purpose acquisition company. This astronomical rise made little sense to many industry experts.
Since the stock symbol changed to "VFS" after the SPAC merger on August 15, trading has remained highly erratic. Within just 36 trading days, shares have experienced fluctuations of over 10% on 20 occasions. On average, gains or losses have reached about 22%.
This high level of volatility tends to attract more traders, resulting in further significant price movements. It is likely that this dynamic explains both the gains and losses witnessed by VinFast's stock.
To date, there are yet to be any analysts covering the company, according to FactSet. On September 21, VinFast provided guidance regarding its full-year deliveries. The company anticipates delivering between 40,000 and 50,000 electric vehicles (EVs) in 2023 (excluding e-scooter sales). Consequently, it still has approximately 30,000 to 40,000 EVs to sell in the second half of this year.
While this information was not new as of Wednesday, some investors may perceive these delivery projections as overly ambitious. Since the announcement, VinFast's stock has plummeted by around $9 per share, translating to a 52% decline.
Currently valued at $8.15 per share, VinFast's market capitalization stands at approximately $19 billion. This places the company below Rivian Automotive (RIVN), which boasts a market capitalization of about $21 billion. Interestingly, Rivian Automotive experienced a 6% increase in its shares on Wednesday, surpassing VinFast's market cap.
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