Vietnam’s homegrown electric car producer, VinFast, is gearing up to trade its shares on the Nasdaq stock exchange in the United States, with plans to start as early as next week. This strategic move has not only propelled the value of VinFast’s parent company, but it has also led to a significant increase in the shares of the company facilitating this process.
VinFast’s presence on Nasdaq means its shares can be bought and sold easily. This opens doors for VinFast to attract investment from new backers and allows individuals to become partial owners of the company. It’s akin to sharing ownership with the wider public. Those who already own VinFast shares can also choose to sell some of their ownership. Nasdaq is enhancing VinFast’s visibility and increasing its brand recognition.
As anticipated, Vingroup, the parent company of VinFast, experienced a nearly 7% surge in its shares within a single day on the Vietnam stock market. In parallel, shares of Black Spade (BSAQ.A), the special purpose acquisition company (SPAC) merging with VinFast for this listing, skyrocketed by 73%, reaching a closing price of $18.50 on Thursday.
Shareholders of Black Spade voted in favor of this special process. Both VinFast and Black Spade confirmed their intention to list VinFast’s shares on Nasdaq, with the commencement date set for August 15. This is a significant stride for VinFast, as it seeks recognition in the US market and plans to establish a car manufacturing facility there.
Pham Nhat Vuong, the owner of VinFast, recognized the merit of listing the company’s shares in the US. This strategic move is poised to accelerate VinFast’s expansion and sales of electric cars in the country.
When this merger process began, VinFast’s valuation hovered around $23 billion. In comparison, other US-based electric car manufacturers, like Rivian and Lucid, boast valuations of $21 billion and approximately $16 billion, respectively. Those who already possess VinFast shares will continue to own the majority of the company, about 99%.
VinFast has already dispatched around 3,000 electric cars to the US from its Vietnamese manufacturing facility. The company introduced its first electric vehicles in March. However, specific sales figures for the US market have not been disclosed.
VinFast’s revenue in the first quarter experienced a 49% drop from the previous year, with a net loss of $598 million. In 2022, the company reported a loss of $2.1 billion. Profitability has not yet been achieved.
Vuong, who also serves as the chairman of Vingroup, Vietnam’s largest conglomerate, shared in May that VinFast aims to sell up to 50,000 electric vehicles in 2023 and potentially break even by the end of 2024.
VinFast has encountered challenges in meeting its internal delivery goals and is facing stiff competition from established contenders led by Tesla. These rivals have been driving prices down and introducing new electric vehicles to the market.
Black Spade was established by the private investment arm of Lawrence Ho, the son of the late gambling magnate Stanley Ho.