What happened
Shares of VinFast Auto (VFS -0.99%) are jumping yet again today. After a spike of nearly 30% Friday morning, the Vietnamese electric vehicle (EV) maker's stock was still higher by 17.5% as of 10:55 a.m. ET.
After going public through a combination with a special purpose acquisition company (SPAC) last week, today's move has helped the newly public stock nearly quadruple just this week.
So what
The sharp rise now has the company's market cap at nearly $130 billion -- more than Ford and General Motors combined. Investors may have never heard of it, but it sits only behind Tesla with its valuation. It is even worth more than China-based BYD, the second-largest global EV maker.
The excitement surrounding the company is somewhat hard to understand and it may be more stock trading mechanics behind the surprising move. VinFast only made 1% of its shares publicly available while the remaining 99% remain controlled by the company's founder. That has led to high volatility in its first two weeks of trading.
Now what
The company broke ground on a new factory in the U.S. last month, but that North Carolina facility isn't scheduled to begin production until 2025. VinFast only sold 24,000 cars globally last year. And though it recently made its second shipment into the U.S. this spring, its EVs don't seem to stand out as having a differentiating appeal.
The first shipment into the U.S. consisted of its VF 8 SUV City Edition that only had a battery range of 207 miles using EPA testing guidelines. The company said the latest shipment of that model has an improved range and included other trims that have ranges up to 264 miles on a full charge. That might have more appeal to U.S. buyers of electric SUVs.
But that certainly doesn't justify the stock's movement or company valuation. Those that want to play the volatile trading game should beware that company fundamentals aren't at work here.
