Analysts Contend That VinFast Auto (VFS) is Nonetheless a Bubble Regardless of the Steep Fall From Its $200 Billion Market Cap

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It was solely a matter of time on this ongoing bull market {that a} glowing new EV inventory turned the ephemeral darling of the market, solely to see its fortunes reversed as sanity returned to the collective psyche of traders. Vietnam’s VinFast Auto (NASDAQ: VFS) not too long ago rose to unfathomable heights largely on the again of mispriced expectations and is at present within the technique of returning to its honest market worth, in a transfer that’s harking back to the heydays of the post-COVID interval.

For the advantage of those that may not bear in mind, Singapore-based VinFast presents two compact electrical SUVs – the VF6 and VF7 – in addition to two full-fledged eSUVs – the VF8 and VF9 fashions – within the US. The corporate’s manufacturing is based inside a “totally digital” $1.5 billion, 828-acre facility on the Cat Hai island in Vietnam. The corporate delivered round 11,300 EVs within the first half of 2023, with the full-year deliveries anticipated to materialize at round 25,000 items. The corporate not too long ago went public by present process a reverse merger with the SPAC Black Spade Capital, with the inventory of the mixed firm debuting on the Nasdaq alternate on the fifteenth of August, 2023.

I proceed to view $VFS as the most important EV bubble since $NKLA. Whereas $VFS has plunged from $180B market cap at peak it nonetheless has $40B market cap vs $GM $45B, $F $48B and $RIVN $15B (web of money). VFS delivered 11.3K EVs in 1H (RIVN 21K) and would possibly ship 25K autos in 2023 (vs… https://t.co/fZT4tftunT pic.twitter.com/VjTDFYMJBj

— Gary Black (@garyblack00) September 8, 2023

This brings us to the crux of the matter. At its peak towards the top of August, VinFast shares had been altering palms at a worth of round $80, comparable to a peak market capitalization of $200 billion. At present, the inventory is buying and selling at $16.30, which equates to a market cap of $37.51 billion.

But, based on analysts such because the Future Fund’s Gary Black, VinFast’s honest worth lies at round $5 per share, equating to a market capitalization of simply $11 billion.

$VFS $VFSWW I’ve confirmed warrants are exercisable this morning https://t.co/4ykpkMT8xa

— RLH Capital (@valwithcatalyst) September 11, 2023

In the meantime, VinFast shares are down 5 p.c in the present day as Black Spade Capital’s warrants have now develop into exercisable, permitting their holders the chance to buy VinFast’s abnormal shares at a set worth of $11.50 per share. Given the sizable arbitrage concerned, it could make sense for some speculators to purchase the corporate’s shares on the supplied low cost after which attempt to unload these shares available in the market.