Shares of Vietnamese car company, VinFast (VFS) are up more than 78% in premarket trading as the company prepares for its debut trading day in the U.S. following its merger deal with special acquisitions company, Black Spade.
Using Lucid Group (NASDAQ:LCID), a competing electric vehicle manufacturer, as a reference point, VinFast and Black Spade (NYSE:BSAQ) have arrived at a valuation of $23 billion. This valuation ranks as the fourth highest among deals involving special purpose acquisition companies (SPAC), based on information from Dealogic.
Several other electric vehicle manufacturers have also opted for listings through similar SPAC arrangements, drawing heightened attention from both investors and regulatory bodies. This scrutiny has intensified notably as competition within the electric vehicle market escalates, and as China's automotive sector, the world's largest, becomes heavily involved in a price war.
A few of VinFast's competitors, including Nikola (NASDAQ:NKLA) and Lucid, have witnessed substantial declines in their valuations following their SPAC listings. Presently, Nikola holds a market value of $1.4 billion, down from $13.9 billion prior to its listing, while Lucid's current market value stands at $15.5 billion, a drop from its $24 billion valuation during its SPAC deal in 2021.
Pham Nhat Vuong, the wealthiest man in Vietnam and the founder of VinFast, has committed $2.5 billion to provide support to the company, with $1 billion sourced from his personal wealth. Following the merger, he now possesses 99% of the common shares.
The exact number of shares designated for trading and their valuation for VinFast's debut on the Nasdaq exchange have yet to be specified. VinFast had previously abandoned its intentions for a $2 billion conventional listing in favor of the SPAC merger. Following the completion of the merger, investors from Black Spade Acquisition chose to divest more than 80% of their shares, leading to a residual sum of about $14 million within the company's trust.
Shares of VFS are up 78.85% in premarket trading Tuesday morning.