Vietnam’s electric vehicle maker, VinFast, made an impressive debut on the Nasdaq this Tuesday, with its shares surging over 200%. This impressive surge in share prices brought a windfall to the company’s major shareholder, Pham Nhat Vuong, catapulting his net worth to a staggering $44.3 billion — a monumental increase of $39 billion in just a single day.
The remarkable ascent of Vietnam’s richest individual, Pham Nhat Vuong, unfolded on Tuesday as the shares of his electric vehicle enterprise, VinFast, experienced an extraordinary surge during their Nasdaq introduction. Vuong, aged 55, now commands a net worth of $44.3 billion, an astounding $39 billion augmentation from his valuation just the day prior, as reported by the Bloomberg Billionaires Index. To put this into perspective, his net worth was previously assessed at $5.3 billion.
This seismic shift in wealth can be attributed to VinFast’s shares initiating trading at $22 each on the Nasdaq stock exchange, representing an exceptional spike of more than 200% compared to the pre-agreed share price of $10 in collaboration with Black Spade Acquisition, VinFast’s strategic partner. Each share was valued at $37.06 when the trading session concluded, although this decreased by 14% during after-hours trading.
Bloomberg determines Pham Nhat Vuong’s net worth based on his significant 61% stake in Vingroup, a conglomerate headquartered in Hanoi and the parent company of VinFast. In addition, Vuong maintains direct or indirect control over 99% of VinFast’s ownership, effectively limiting the availability of shares for trading on the open market.
It’s important to note that the relatively limited quantity of shares available for public trading means that VinFast’s stock is subject to thinner trading, and this circumstance casts some uncertainty on the sustainability of the remarkable gains observed, including the meteoric rise in the tycoon’s fortune. Consequently, Bloomberg will only update Vuong’s net worth once trading in VinFast stabilizes.
Vuong’s vision extends beyond personal success. In a 2019 interview with Tuoi Tre News, he expressed a fervent desire to position Vietnam on the global corporate stage, drawing parallels to industry giants like Hyundai, Toyota, Microsoft, and Apple. “The US has Microsoft and Apple,” the billionaire said in a 2019 interview. “Why doesn't Vietnam have anything similar?”
What is Nasdaq?
And what does being listed on Nasdaq mean for companies from Vietnam and worldwide?
The National Association of Securities Dealers Automatic Quotations or NASDAQ is where companies trade ownership shares. It’s the second-largest stock market platform worldwide. The New York Stock Exchange (NYSE) is even bigger and worth a huge amount of money – nearly $24.3 trillion as of May 2023.
What makes NASDAQ special is that it was the first place where people could use computers to trade stocks in a clear way. Other places also use computers, but NASDAQ still stands out because it mainly focuses on high-tech companies.
Dubbed “Vietnam’s Tesla,” VinFast recently became part of Nasdaq. This is a big deal, but it’s not the first time a Vietnamese company has done this. Before VinFast, there was Society Pass (SoPa), led by CEO Dennis Nguyen. In November 2021, SoPa got $28 million from being listed and became the first Vietnamese company on Nasdaq.
So, what benefits and advantages can companies get from being on Nasdaq?
- Access to Capital: Going public on NASDAQ provides Vietnamese companies access to a broader investor base and the ability to raise capital for future growth initiatives. These funds can be used to expand operations, invest in research and development, and explore new markets.
- Global Visibility: Listing on NASDAQ significantly enhances the visibility and credibility of Vietnamese companies in the eyes of international investors, partners, and customers. It's an opportunity to showcase innovation, demonstrate financial stability, and attract attention from potential business collaborators.
- Enhanced Governance and Transparency: NASDAQ-listed companies are subject to rigorous reporting and compliance standards, which promotes greater transparency and accountability. This can bolster investor confidence and contribute to a culture of good corporate governance.
- Valuation and Brand Recognition: A successful listing on NASDAQ can positively influence a company's valuation, potentially leading to increased market capitalization. Moreover, it can bolster the company's brand recognition domestically and internationally.
- Path to Future Growth: Being part of the global capital markets provides Vietnamese companies a platform for future growth opportunities. The ability to easily access additional capital through secondary offerings can fuel further expansion and innovation.