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VinFast VF8 electric cars destined for freight at a port in Haiphong, Vietnam.
In Pham/Bloomberg
Finfast Auto
The stock will not decrease. Shares rose for the sixth day in a row, and the market capitalization of the stock was incomprehensibly large. However, the massive gains may not generate the wealth that investors think.
Shares of the Vietnamese start-up in the field of electric cars rose by about 20% to about $82.50 a share. This makes the market value around $190 billion. That’s more than
general motors
(General Motors),
Ford Motor
(F), the parent of Chrysler Corporation
excellent
(STLA) combined, more than twice
BYD
(1211.HK), China’s largest maker of electric vehicles. It’s also about a quarter of its value
Tesla
(TSLA), the largest electric vehicle maker on the planet.
The numbers don’t really make sense. VinFast is not yet profitable and has a fraction of the capacity of those car companies. The stock appears to be in Mimi territory, which is possible in part because only 16 million or 17 million shares are available for trading. The remaining 2.3 billion outstanding shares are held by insiders.
However, six days and 436% is nothing worth sniffing. Nearly $165 billion market cap has been created. Maybe someone got really rich. Things are not rosy though. For shares available for trading, only about $1 billion in wealth has been generated. None of the investors, or perhaps just a few of them, held the stock for six days.
About 65 million shares of VinFast stock, and counting, have been traded over the past six days. The shares available for trading have been traded about four times. The average retention period is about 1.5 days.
Insiders have accumulated the majority of the new paper fortune of $165 billion. However, most of them cannot sell the shares yet, and more share trading is likely to drive the price down. It’s one thing to find someone to take thousands of shares; Finding someone to take millions is another thing entirely.
The trading has been wild. And this is not a short squeeze either. S3 Partners said Barron Recently, this short interest in VinFast shares has dwindled to almost zero. This is the traders who play with values on their own.
Write to Al Root at allen.root@dowjones.com
(tags for translation) Automotive
