A class action lawsuit was filed against VinFast Auto Ltd. (NASDAQ:VFS) on April 12, 2024. The plaintiffs (shareholders) alleged that they bought VFS stock at artificially inflated prices, pursuant and/or traceable to the Offering Documents (as defined in the complaint) issued in connection with a merger detailed in the complaint; and/or between August 15, 2023 and January 17, 2024, both dates inclusive (the Class Period). The plaintiffs are now seeking compensation for their financial losses. Investors who bought VFS stock during that period can click here to learn about joining the lawsuit.
Vietnam-based VinFast designs and manufactures premium electric vehicles (EVs) including autos, e-scooters, and e-buses. Its dealers are spread across North America, Europe, and Asia.
The plaintiffs maintain that VinFast Auto and four of its senior officers and/or directors deceived investors by lying and withholding vital information about the company’s business practices and prospects during the Class Period. Importantly, they are accused of withholding truthful information about VinFast’s ability to execute its growth strategy, its ability to meet its 2023 delivery targets, and the strength of its business model from SEC filings and related material.
The information became clear in a series of events up to January 18, when VFS released its Q4 deliveries. The company failed to meet its delivery target of 50,000 units, selling only 34,855 vehicles in 2023. The company cited economic headwinds and sluggish EV adoption rate in certain regions as the reason for missing delivery estimates.
Interestingly, during the Class Period, the defendants claimed that being listed (IPO) was an important step for the company to raise capital and have access to the capital markets for future development. Also, the plaintiffs stated that VinFast was set to capture the global markets with its EVs and help in transitioning the world toward a greener future.
As per the class action lawsuit, VinFast Auto caused its stock to trade at artificially inflated prices by knowingly and recklessly misleading investors about the company’s business prospects during the Class Period.
Notably, VFS stock has lost nearly 53% since its initial listing in August 2023, causing massive damage to shareholders’ returns.
