Shares of Vinfast Auto Ltd. experienced an astonishing surge of 109%, adding a staggering $44 billion to the Vietnamese electric vehicle maker's market value on Tuesday. This continues the incredible momentum that Vinfast has experienced since it went public, with its stock skyrocketing 251% since its debut on August 15th. The company's market capitalization now exceeds $84 billion, surpassing industry giants General Motors Co. and Ford Motor Co.
The latest rally on Tuesday was fueled by significant trading activity, with over 19 million shares changing hands. Despite only a small portion of shares being available for trading, investors have been actively flipping the stock. Currently, there are only 1.3 million shares available for trading, which means that volatility is expected as lower-float stocks tend to experience significant price swings.
This surge in share price has significantly boosted the wealth of Vinfast's chairman and founder, Pham Nhat Vuong. The sharp movements in the company's stock, of which Vuong controls 99%, have catapulted Vietnam's richest man's fortune from $21.2 billion on Friday to $43.4 billion today.
While Vinfast's rapid rise in value is impressive, it's important to note that many companies that merged with special-purpose acquisition companies (SPACs) have experienced rallies that eventually fizzle out. Typically, after the initial excitement surrounding the merger subsides, the stock prices of these companies tend to decline. In fact, de-SPACs that have debuted this year have, on average, seen a median slump of around 45%, with 15 of them losing over 80% of their value, according to Bloomberg data.
Despite this potential for volatility, Vinfast's impressive performance continues to make it one of the top-performing companies that went public via a SPAC merger this year. Its shares are currently trading above $35, following its successful tie-up with Black Spade Acquisition Co. As investors brace for potential swings, the shortage of available shares indicates that the stock's turbulent journey may not be over just yet.