Vietnam Tycoon Faces Volatility: VinFast’s Roller-Coaster Debut Shakes Founder’s Wealth

The world of electric vehicles (EVs) and green technology has been a hotbed of innovation and investment in recent years. One company that has captured significant attention in this space is VinFast Auto Ltd., a Vietnamese electric-vehicle manufacturer that made a remarkable debut on the Nasdaq stock exchange. The company’s initial public offering (IPO) took investors and the founder, Pham Nhat Vuong, on a wild ride, resulting in dramatic shifts in the company’s stock price and the chairman’s net worth.

The roller-coaster journey began with VinFast’s shares soaring an astonishing 255% to $37.06 on its first day of trading, Tuesday, after merging with a blank-check company. This surge in share price on its debut day marked one of the most significant wealth jumps ever recorded in the Bloomberg Billionaires Index. Chairman Pham Nhat Vuong, who holds an overwhelming majority of the company’s shares through his business conglomerate, Vingroup JSC, appeared to have gained nearly $40 billion on paper overnight. This sudden surge was a reflection of investors’ excitement and optimism about the future of electric vehicles, particularly in emerging markets like Vietnam.

However, this euphoria was short-lived. In the days following the IPO, VinFast’s shares experienced considerable volatility, with the price dropping significantly to close at $15.40 by the end of the week. This three-day decline led to a staggering drop in Pham Nhat Vuong’s net worth, which plummeted by approximately 52% to $21.2 billion. While this might seem like a significant loss, it’s essential to put it into perspective. Vuong’s massive net worth dip is a consequence of the concentrated ownership structure of VinFast.

Vuong controls an astonishing 99% of VinFast’s stock, primarily through his business conglomerate, Vingroup JSC. This level of control means that the remaining fraction of shares available for trading by other investors is minuscule. As a result, even relatively small transactions can trigger substantial fluctuations in the stock price. This kind of extreme price movement is a characteristic often seen in companies with concentrated ownership.

The market capitalization of VinFast reached its zenith during this whirlwind week, peaking at an impressive $85 billion, momentarily surpassing automotive giant General Motors Co. This remarkable feat was achieved despite VinFast’s projected sales for the year being lower than what GM typically achieves in just a week. However, as the initial surge subsided and the stock price retreated, the market capitalization settled around $36 billion by the end of the week. This valuation still placed VinFast ahead of its electric vehicle competitors, including Rivian Automotive Inc., Nio Inc., and Lucid Group Inc.

For Chairman Pham Nhat Vuong, this dramatic ride has been a testament to the power of concentrated ownership, investor sentiment, and the inherent volatility of emerging industries like electric vehicles. While the roller-coaster IPO week might have caused significant fluctuations in his net worth, it’s important to note that his overall wealth remains substantial. The unique ownership structure that led to these swings also underscores the broader challenges and opportunities associated with corporate governance, market speculation, and the evolving landscape of sustainable transportation.