Shares of Vietnamese EV start-up, VinFast, experienced a significant setback on Tuesday, marking the end of a six-day winning streak as they fell 44%. This drop resulted in a market value decline of approximately $90 billion.
VinFast’s controlling shareholder, Pham Nhat Vuong, also faced substantial losses as his paper wealth diminished by around $67 billion. Previously, his stake in VinFast was valued at roughly $141 billion, positioning him just below Jeff Bezos on Bloomberg’s list of the wealthiest individuals. However, following Tuesday’s closing, his stake was worth approximately $74 billion, placing him just above Jim Walton, son of Walmart founder Sam Walton.
Vuong’s holdings of VinFast stock are somewhat complex. Of VinFast’s 2.3 billion outstanding shares, 1.2 billion are held by Vingroup (VIC.Vietnam). Vuong personally owns 51% of that stock either directly or through Vietnam Investment Group (VIG), where he is listed as the sole shareholder. Additionally, VIG and Asian Star, another entity controlled by Vuong, directly hold about 1.1 billion shares of VinFast.
Consequently, Vuong effectively controls around 99.7% of VinFast stock and directly or indirectly owns approximately 1.7 billion shares through investment companies.
All this information can be found in VinFast’s filings with the Securities and Exchange Commission. Unfortunately, the company has not responded to a request for comment regarding their holding structure.
While this loss is substantial, it’s important to note that at the time of the SPAC merger, Vuong’s stake was valued at around $18 billion. Therefore, despite the setback, he still maintains a substantial gain of over 300%.
In terms of market capitalization, VinFast still exceeds $100 billion and remains the third most valuable automaker globally, trailing only behind Toyota Motor (TM) and Tesla (TSLA). Depending on how warrants and options are accounted for, VinFast holds a higher position than Porsche (P911.Germany) and BYD (1211.Hong Kong).
BYD, China’s leading EV manufacturer, sold over 1.2 million EVs, including battery-electric and plug-in hybrid models, in the first half of 2023. In comparison, VinFast sold approximately 11,300 battery-electric vehicles during the same period.
Investors hold optimistic expectations for VinFast’s future. However, many find it challenging to justify the company’s current valuation.