Incredible race for the shares of the Vietnamese electric car maker
It continued on Friday, making it the second most valuable automobile stock on the planet, behind only the
A startup might want to consider using its high share price to its advantage.
While the world was watching
(Ticker: NVDA) Following the second-quarter earnings report, VinFast shares rose 32% Thursday, closing at $49. With about 2.3 billion shares outstanding, that gives the company a market capitalization of about $114 billion, more than
The stock added nearly $5 billion in market value on Thursday. VinFast added about $28 billion.
Shares of VinFast were again much higher on Friday, jumping nearly 22% to $59.68 a share. the
Standard & Poor’s 500
They decreased by 0.4% and 0.6%, respectively. At roughly $60 a share, VinFast has a market capitalization of about $140 billion.
The stock is also worth more than
(P911. Germany), worth nearly $100 billion, not to mention the second largest maker of battery electric vehicles, or BEVs, on the planet,
(1211. Hong Kong), which is worth about $92 billion.
Only Tesla, the largest producer of electric cars, is worth more. Tesla has a market capitalization of about $720 billion.
The deal struck by VinFast management to have the company value the stock at about $23 billion. Few saw the huge payoffs coming.
The only thing a rising share price can do is provide the opportunity to raise capital. VinFast is not generating free cash flow yet and will need more money from outside sources to build up its business. The company did not immediately respond to a request for comment about its fundraising plans.
One problem with raising capital with a fast-rising stock is that it can be a catalyst for a price drop. If VinFast is to raise $1 billion by selling roughly 20 million shares, it will have to put those 20 million shares to investors. That will be significant because only about 17 million shares are available for trading after the merger with the SPCA that brought VinFast to IPO. Most of them are held by Insiders.
That figure of 17 million is one of the reasons stocks have risen so much. At least $1 billion in shares are being actively bought and sold. This is small enough to be affected by traders.
There is a lot of work. More than 40 million shares were traded during the past three sessions. This makes the average holding period for a trader or investor in a stock to be around 1.3 days.
Short sellers are one type of trader. They borrow shares they don’t own and sell them, betting that prices will fall. The early short sellers did not fare well. said Managing Partner of S3 Partners, Ihor Dusanewski Barron Approximately 1.2 million shares were shorted immediately after the closing of the SPAC merger. These short sellers dropped in the range of $20 million. But this number is only an abstract idea. Traders could have bought and sold stocks many times since then.
Looks like the shorts have run for the hills. Dusanewski said Barron Friday that there are only about 100,000 shares short now. If traders were trying to short squeeze, it has already been done.
Write to Al Root at email@example.com
(tags for translation)Automobiles