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Should You Buy the Slump in VinFast? ETFs in Focus
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Vietnamese electric vehicle manufacturer VinFast (VFS - Free Report) made its debut on the Nasdaq exchange with a soaring stock performance on thin trading. The company's backdoor listing, valued at $23 billion, has positioned it for global investor interest within the next 18 months.
The company’s CFO sees sure-shot capital raising in the next one-and-half year. The firm has already identified strategic and institutional investors, with plans to initiate capital-raising efforts within the next 18 months.
Impressive Stock Surge Beyond Initial Valuation
VinFast's shares opened at $22, marking a considerable uptick from the $10 per share agreed upon with its Special Purpose Acquisition Company (SPAC) partner, Black Spade Acquisition. The stock further surged throughout the trading session, closing at $37.06 on its debut day on Aug 15.
This surge resulted in a remarkable market capitalization of $85 billion on Aug 15, outstripping renowned automakers like Ford (F) and General Motors (GM). However, profit-booking hit the EV maker on Aug 16 as the stock slumped about 20%.
Strategic Moves and Market Approach
VinFast's founder, Pham Nhat Vuong, has ambitions to challenge industry frontrunner Tesla. With a $4 billion factory in development and an innovative sales approach, VinFast is looking to make a unique place for itself in the electric vehicle market, per Reuters.
Despite shipping nearly 3,000 vehicles to North America, VinFast has met with sluggish initial sales. Only 137 of its electric vehicles had been registered in the United States through June, per the Reuters article. VinFast CEO, however, revealed plans to shift the company's distribution strategy.
Moving away from its previous direct-to-consumer approach modeled after Tesla, VinFast is now implementing a hybrid model that combines company showrooms with dealer partnerships in overseas markets.
Financial Performance and Expansion
VinFast reported a 49% drop in first-quarter revenues compared to the previous year and posted a net loss of $598 million. Its losses for 2022 were $2.1 billion. However, the company remains committed to the expansion and is actively constructing a $4 billion plant in North Carolina.
Competitive Pricing and Future Strategies
VinFast's American and European entry comes at a time when Tesla and other Chinese companies are spearheading competitive EV pricing. The company's VF8 starts at $46,000 in California, slightly lower the Tesla Model Y's price of $47,740 before considering federal tax credits.
VinFast foresees introducing its larger VF9 EV to the U.S. market by the end of the year. The company is also in the process of obtaining certification from Europe's safety regulator, which will further bolster its global presence.
ETFs in Focus
The successful market debut of Vinfast could pave its entry into a number of ETFs in the coming days. Investing in those ETFs could be a compelling way to place a bet on Vinfast. Hence, those who are interested in playing Vinfast through a basket approach should track the following ETFs continuously.
Image: Bigstock
Should You Buy the Slump in VinFast? ETFs in Focus
Vietnamese electric vehicle manufacturer VinFast (VFS - Free Report) made its debut on the Nasdaq exchange with a soaring stock performance on thin trading. The company's backdoor listing, valued at $23 billion, has positioned it for global investor interest within the next 18 months.
The company’s CFO sees sure-shot capital raising in the next one-and-half year. The firm has already identified strategic and institutional investors, with plans to initiate capital-raising efforts within the next 18 months.
Impressive Stock Surge Beyond Initial Valuation
VinFast's shares opened at $22, marking a considerable uptick from the $10 per share agreed upon with its Special Purpose Acquisition Company (SPAC) partner, Black Spade Acquisition. The stock further surged throughout the trading session, closing at $37.06 on its debut day on Aug 15.
This surge resulted in a remarkable market capitalization of $85 billion on Aug 15, outstripping renowned automakers like Ford (F) and General Motors (GM). However, profit-booking hit the EV maker on Aug 16 as the stock slumped about 20%.
Strategic Moves and Market Approach
VinFast's founder, Pham Nhat Vuong, has ambitions to challenge industry frontrunner Tesla. With a $4 billion factory in development and an innovative sales approach, VinFast is looking to make a unique place for itself in the electric vehicle market, per Reuters.
Despite shipping nearly 3,000 vehicles to North America, VinFast has met with sluggish initial sales. Only 137 of its electric vehicles had been registered in the United States through June, per the Reuters article. VinFast CEO, however, revealed plans to shift the company's distribution strategy.
Moving away from its previous direct-to-consumer approach modeled after Tesla, VinFast is now implementing a hybrid model that combines company showrooms with dealer partnerships in overseas markets.
Financial Performance and Expansion
VinFast reported a 49% drop in first-quarter revenues compared to the previous year and posted a net loss of $598 million. Its losses for 2022 were $2.1 billion. However, the company remains committed to the expansion and is actively constructing a $4 billion plant in North Carolina.
Competitive Pricing and Future Strategies
VinFast's American and European entry comes at a time when Tesla and other Chinese companies are spearheading competitive EV pricing. The company's VF8 starts at $46,000 in California, slightly lower the Tesla Model Y's price of $47,740 before considering federal tax credits.
VinFast foresees introducing its larger VF9 EV to the U.S. market by the end of the year. The company is also in the process of obtaining certification from Europe's safety regulator, which will further bolster its global presence.
ETFs in Focus
The successful market debut of Vinfast could pave its entry into a number of ETFs in the coming days. Investing in those ETFs could be a compelling way to place a bet on Vinfast. Hence, those who are interested in playing Vinfast through a basket approach should track the following ETFs continuously.
Renaissance IPO ETF (IPO - Free Report)
First Trust US Equity Opportunities ETF (FPX - Free Report)
First Trust S-Network Future Vehicles & Technology ETF (CARZ - Free Report)
Global X Autonomous & Electric Vehicles ETF (DRIV - Free Report)