What happened

VinFast Auto (VFS -0.99%) went public through a special purpose acquisition company (SPAC) merger less than two weeks ago and the stock has made headlines ever since. Shares have soared by about 385% in just the past five trading days. That surge continued today with shares trading up by 20% as of 2:20 p.m.

Investors should be careful about trying to get in on the massive move higher. There is no business-related company news driving the move. Just the hype behind its recent public listing. 

So what

The stock is soaring not because of how successful the company is, but because of its low share count combined with investor excitement. The SPAC merger left 99% of the Vietnamese electric vehicle (EV) company in the hands of founder Pham Nhat Vuong. Barron's reports the company only has a float of about 16 million shares that can be publicly traded. According to MarketWatch the average daily trading volume is over 8 million shares. 

That means half of the entire share float is being traded each day on average. The result is hype that resulted in the money-losing start-up company having a market cap of about $190 billion. 

Now what

Bloomberg reports that of the companies on the Nasdaq Stock Market with a market cap of at least $113 billion, none had revenue less than about $13 billion last year. VinFast sold about 24,000 cars last year, generating revenue of $634 million.

That puts Vinfast's price-to-sales (P/S) ratio at about 250. By comparison, EV start-up Rivian Automotive -- which delivered about 20,000 vehicles in 2022 -- has a P/S ratio of about 11 based on 2022 sales. 

VinFast also reported a loss of more than $2 billion last year. Investors trying to jump into the frenzy should be aware of the company's fundamentals. They should also realize that the extremely low float means that the stock could plummet as fast as it has recently soared. With such a small float, a low number of investors can move the shares. Thus far, those moves have been higher. But if those investors decide to take profits, the reverse would occur.