Its electric cars have been dogged by poor reviews and it’s on pace to make fewer sales this year than General Motors does in a week.
Yet that hasn’t stopped VinFast Auto from becoming the latest beneficiary of speculative fervour around newly minted Spac deals – many of which end up tumbling over the long-term.
The Vietnamese auto maker’s shares surged 255 per cent on Tuesday when it debuted on the Nasdaq Global Select Market, pushing the company’s market capitalisation above that of industry giants GM and Mercedes-Benz Group.
It added $39 billion to the net worth of chairman Pham Nhat Vuong, whose fortune now stands at $44.3 billion, according to the Bloomberg Billionaires Index.
It’s the latest example of a thinly traded company soaring on its debut after completing a merger with a special-purpose acquisition company.
Many have experienced eye-popping rallies that ended a few trading sessions after the merger closed, as traders look to make a quick profit on companies with limited shares – meaning the jump in Mr Vuong’s wealth may be short-lived.
De-Spacs – the term for firms that go public via a Spac merger – that have made their debut this year have seen a median slump of about 45 per cent, with 18 of them wiping out more than 70 per cent of their value, according to data compiled by Bloomberg.
Regulatory filings show Mr Vuong, Vietnam’s richest man, directly and indirectly controls 99 per cent of the company’s outstanding shares, mostly through his conglomerate, Vingroup.
That large stake limits the shares available for other investors to trade, meaning the stock is prone to large swings. The Bloomberg Billionaires index hasn’t previously included Vuong’s stake in the car maker, which he founded in 2017.
If VinFast can hold on to its gains, it will be in a somewhat unique position given the dismal performance of other electric car makers taken public via Spacs, including Lordstown Motors, Nikola and Faraday Future Intelligent Electric, all of which lost more than 90 per cent of their market value since their mergers.
VinFast, though, has been weighed down by operational problems.
In May, it recalled all the electric sport utility vehicles shipped to the US over a software malfunction and there have been some negative reviews. The company also cut some of its US workforce, sales have been modest and its net losses are widening.
“There have been some negative reviews,” VinFast chief executive Le Thi Thu Thuy told Bloomberg Television Tuesday.
“We take them very close to our heart, we reflect on the feedback from those reviews and we make our vehicles better.”
In the six years it has been operating, VinFast has taken in $9.3 billion of financing to cover its operating and capital expenditures, much of it coming from Mr Vuong’s other businesses.
Still, the company, which began building a factory in North Carolina last month, forecasts sales will reach 45,000 to 50,000 this year and Mr Vuong predicts it will break even by the end of 2024.
VinFast had been planning a normal initial public offering, but scrapped that and opted for a Spac listing after investor appetite for money-losing start-ups waned over the past year. Instead, it agreed to merge with blank-check company Black Spade Acquisition, founded by casino mogul Lawrence Ho.
Mr Vuong, who studied geoeconomic engineering in Russia, made his fortune in the 1990s in Ukraine with a business making instant noodles. The Hanoi-born businessman sold it to Nestle in 2010, nine years after he had returned to Vietnam.
By that time, he’d already established publicly-traded Vingroup, focused on real estate, resorts, schools, shopping malls and more. The firm booked revenue of $4.4 billion last year, and remains a major shareholder in VinFast.
What is an ETF?
An exchange traded fund is a type of investment fund that can be traded quickly and easily, just like stocks and shares. They come with no upfront costs aside from your brokerage's dealing charges and annual fees, which are far lower than on traditional mutual investment funds. Charges are as low as 0.03 per cent on one of the very cheapest (and most popular), Vanguard S&P 500 ETF, with the maximum around 0.75 per cent.
There is no fund manager deciding which stocks and other assets to invest in, instead they passively track their chosen index, country, region or commodity, regardless of whether it goes up or down.
The first ETF was launched as recently as 1993, but the sector boasted $5.78 billion in assets under management at the end of September as inflows hit record highs, according to the latest figures from ETFGI, a leading independent research and consultancy firm.
There are thousands to choose from, with the five largest providers BlackRock’s iShares, Vanguard, State Street Global Advisers, Deutsche Bank X-trackers and Invesco PowerShares.
While the best-known track major indices such as MSCI World, the S&P 500 and FTSE 100, you can also invest in specific countries or regions, large, medium or small companies, government bonds, gold, crude oil, cocoa, water, carbon, cattle, corn futures, currency shifts or even a stock market crash.
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Which honey takes your fancy?
Al Ghaf Honey
The Al Ghaf tree is a local desert tree which bears the harsh summers with drought and high temperatures. From the rich flowers, bees that pollinate this tree can produce delicious red colour honey in June and July each year
Sidr Honey
The Sidr tree is an evergreen tree with long and strong forked branches. The blossom from this tree is called Yabyab, which provides rich food for bees to produce honey in October and November. This honey is the most expensive, but tastiest
Samar Honey
The Samar tree trunk, leaves and blossom contains Barm which is the secret of healing. You can enjoy the best types of honey from this tree every year in May and June. It is an historical witness to the life of the Emirati nation which represents the harsh desert and mountain environments
Difference between fractional ownership and timeshare
Although similar in its appearance, the concept of a fractional title deed is unlike that of a timeshare, which usually involves multiple investors buying “time” in a property whereby the owner has the right to occupation for a specified period of time in any year, as opposed to the actual real estate, said John Peacock, Head of Indirect Tax and Conveyancing, BSA Ahmad Bin Hezeem & Associates, a law firm.
Results
2.30pm: Handicap (PA) Dh40,000 1,700m; Winner: AF Mezmar, Adam McLean (jockey), Ernst Oertel (trainer).
3pm: Maiden (PA) Dh40,000 2,000m; Winner: AF Ajwad, Tadhg O’Shea, Ernst Oertel.
3.30pm: Handicap (PA) Dh40,000 1,200m; Winner: Gold Silver, Sam Hitchcott, Ibrahim Aseel.
4pm: Maiden (PA) Dh40,000 1,000m; Winner: Atrash, Richard Mullen, Ana Mendez.
4.30pm: Gulf Cup Prestige (PA) Dh150,000 1,700m; Winner: AF Momtaz, Saif Al Balushi, Musabah Al Muhairi.
5pm: Handicap (TB) Dh40,000 1,200m; Winner: Al Mushtashar, Richard Mullen, Satish Seemar.
Ruwais timeline
1971 Abu Dhabi National Oil Company established
1980 Ruwais Housing Complex built, located 10 kilometres away from industrial plants
1982 120,000 bpd capacity Ruwais refinery complex officially inaugurated by the founder of the UAE Sheikh Zayed
1984 Second phase of Ruwais Housing Complex built. Today the 7,000-unit complex houses some 24,000 people.
1985 The refinery is expanded with the commissioning of a 27,000 b/d hydro cracker complex
2009 Plans announced to build $1.2 billion fertilizer plant in Ruwais, producing urea
2010 Adnoc awards $10bn contracts for expansion of Ruwais refinery, to double capacity from 415,000 bpd
2014 Ruwais 261-outlet shopping mall opens
2014 Production starts at newly expanded Ruwais refinery, providing jet fuel and diesel and allowing the UAE to be self-sufficient for petrol supplies
2014 Etihad Rail begins transportation of sulphur from Shah and Habshan to Ruwais for export
2017 Aldar Academies to operate Adnoc’s schools including in Ruwais from September. Eight schools operate in total within the housing complex.
2018 Adnoc announces plans to invest $3.1 billion on upgrading its Ruwais refinery
2018 NMC Healthcare selected to manage operations of Ruwais Hospital
2018 Adnoc announces new downstream strategy at event in Abu Dhabi on May 13
Source: The National
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Killing of Qassem Suleimani
War
Director: Siddharth Anand
Cast: Hrithik Roshan, Tiger Shroff, Ashutosh Rana, Vaani Kapoor
Rating: Two out of five stars
