"Vietnam's Tesla" staged a game-like frenzy, soaring 56% intraday, with a market value surpassing $120 billion.

"Vietnam's version of Tesla" VinFast Auto (VFS) experienced another huge shock in its stock price on Thursday, with an intraday increase of up to 56%. The stock price reached a high of $57.8, and the market value temporarily exceeded $120 billion, securing its position as the third-largest listed car company in the world, surpassing Citigroup and more than 400 other companies in the S&P 500 index, second only to Tesla and Toyota.

Last Tuesday, VinFast completed its merger with a special purpose acquisition company (SPAC) called Black Spade Acquisition and began trading on the Nasdaq. On that day, its stock price soared, reaching a high of $38.78 during the trading session and closing at $37.06, a gain of 254.64%.

In the following trading days, VinFast's stock price experienced a roller coaster ride. For example, last Friday, the stock experienced a staggering intraday decline of 42%.

In fact, the significant fluctuations in VinFast's stock price were expected. Pham Nhat Vuong, Chairman and Founder of VinFast and Vietnam's richest person, who holds the majority of VinFast's shares through his conglomerate Vingroup JSC, controls 99% of the company's stock, leaving only a small portion available for other investors to trade. This means that even relatively small trades can have a significant impact on the stock price.

Along with the volatility in VinFast's stock price, Pham Nhat Vuong's net worth has also fluctuated significantly since its listing in the United States. According to the Bloomberg Billionaires Index, as of this Wednesday, Pham Nhat Vuong's wealth reached $43.4 billion.

Established in 2017, VinFast is a subsidiary of Vingroup, one of Vietnam's largest listed companies. From its inception, VinFast has carried the hope of the Vietnamese national automobile industry, with Pham Nhat Vuong setting Tesla as its benchmark.

Although the ambition is great, the company's performance so far has been mediocre. According to the prospectus, VinFast achieved revenues of $576 million, $1.603 billion, and $439 million in the first three quarters of 2020, 2021, and 2022, respectively. The automotive revenue in 2022 even showed a year-on-year decline. At the same time, the company incurred losses of $800 million, $1.348 billion, and $1.445 billion in the respective reporting periods. This means that while revenues have declined, the scale of losses is still expanding. In addition, VinFast has faced negative product reviews and operational challenges.

To date, VinFast has exported approximately 2,100 electric vehicles to the United States and nearly 800 electric vehicles to Canada, with its expected sales volume this year being less than General Motors' weekly sales.

Despite its mediocre fundamentals, VinFast's stock price continues to soar. Just this week, its market value has increased by over $80 billion during trading hours, surpassing the combined market value of General Motors and Ford. Famous bear Jim Chanos called VFS valuation "crazy".

Shorting VinFast seems logical, but analysts warn that it is a risky attempt and not a good trading strategy. After all, the short squeeze events led by GameStop are still fresh in memory.

It is not surprising that the stock prices of companies listed through SPACs have experienced significant fluctuations. Although many companies listed through SPACs have experienced subsequent crashes, it is very difficult to accurately time the high point for shorting. With a small float size, VinFast's stock is costly to borrow for short sellers. According to a director at financial data company S3 Partners, shorting stocks with low liquidity sometimes requires paying interest rates exceeding 100% on an annualized basis.