There was quite a bit of talk in analyst circles about how long it would take until reality settled in over electric vehicle stock VinFast (NASDAQ:VFS). Anyone who had “Tuesday” in the pool is likely feeling pretty good about themselves, as VinFast plunged nearly 40% at the time of writing.
VinFast climbed for six consecutive trading sessions, and analysts were baffled. Major names emerged, wondering how a stock that had little in the way of production and nothing special in the way of new technology announcements could rise so rapidly. Indeed, in less than 10 days of being a publicly-traded company, it could somehow be worth more than IBM (NYSE:IBM) in terms of market cap. Yet, now, VinFast is on the receiving end of a “reality check,” according to traders, who watched VinFast plummet over 34% at one point.
That’s not to say that VinFast will be closed tomorrow; it’s still the third most valuable automobile stock by market cap, worth about $95 billion in total. It’s delivered roughly 19,000 vehicles so far and is readying three new models for launch in not only Vietnam but worldwide as well. And while the ludicrous valuation that VinFast saw just last week certainly could not hold, there are signs that VinFast could be around for some time to come. Several major new connections to component makers and some competitive pricing may make VinFast a successful player in the highly competitive electric vehicle market.
Still, a look at the last five trading days for VFS stock shows us a now-quite-familiar story. VinFast would climb suddenly, plateau, and then climb again, until today. Then VinFast demonstrates that it can go down, wiping out virtually all the gains it made in three trading sessions prior with one day’s reversal.
