Investors unsure on VinFast’s stock surge.

Cash-burning VinFast presents a common concern for EV investors: How long can it sustain its fantastic growth given that it has a larger market capitalisation than both General Motors and Ford combined?

Rivian Automotive and Lucid Group, among others, are currently trading well below their peaks, as a result of the wild swings since the business's first day of trading as a public company.

In a phone interview, Nicholas Colas, co-founder of DataTrek Research, stated, "Over the next month, this will be a coin toss." "This is like a turbo-charged Rivian or Lucid, because there is so little of this stock available, and anyone who walks in and buys 100,000 shares can move the stock."

Through Thursday's closing, VinFast has increased 369% after making its Nasdaq Global Select Market debut last week after merging with Black Spade Acquisition Co., a business that specialises in acquisitions. With a "pretty high" percentage of retail investors — around 10% of total turnover — engaging in the rally, it increased by more than 100% on Tuesday alone.

Moves in either direction are exaggerated by a meagre float of roughly 1.3 million shares. According to regulatory documents, Pham Nhat Vuong, the creator of VinFast and the richest man in Vietnam, owns nearly 99% of the company, partially through shares owned by his wife and Vingroup JSC.

Nevertheless, given that VinFast's electric cars have received unfavourable ratings, the performance can raise questions. According to calculations by Bloomberg, its forecast for units sold this year is less than 1% of what General Motors Co. accomplished in 2022. It recalled every electric sport utility vehicle it had sent to the US in May due to a software flaw. As it reduces back on vehicle manufacturing, the company anticipates more operational and net losses in the near future.

VinFast's market value was $113 billion as of Thursday's end. None of the other 26 Nasdaq businesses had yearly revenues less than $12.7 billion in the previous year among those with such a value or above. In 2022, VinFast earned $633.8 million in revenue.

There are challenges for the sector. Due to declining EV demand, firms, headed by Tesla Inc., have slashed prices significantly. The profit margins will suffer as a result. Additionally, it puts the cherished objective of being profitable even farther into the future for companies that are losing money with each vehicle that leaves their assembly line.

(Sources: Bloomberg.com)