Vietnamese EV maker VinFast fails to cement meme stock status as eye-popping rally fades quickly

Published Fri, Sep 1 202312:55 PM EDTUpdated Fri, Sep 1 20232:23 PM EDT

Frantic trading in VinFast has raised eyebrows, but it's still far from becoming a meme stock. The rally in the Vietnamese electric vehicle maker was once so furious that its market cap briefly surpassed some of the world's largest automakers such as Ford and GM . The stock had gone up almost 700% since it went public via a special purpose acquisition company, or SPAC, in mid-August, briefly touching a whopping $85 billion market capitalization. However, it was easy come, easy go. After a head-scratching six-day winning streak, VinFast has lost 60% this week, cutting its gains since its market debut to about 170%. There has been growing interest from retail crowds in VinFast, but it pales in comparison with other popular Asian carmakers during their peak popularity such as Nio , according to Marco Iachini, senior vice president of research at Vanda Research. "While VFS news coverage is increasing, I'm honestly not very confident that this stock has reached the popularity levels of some of the Chinese carmakers around late '20/early '21," Iachini said. No meme stock VinFast's short-lived rally is reminiscent of the trading frenzy last year in AMTD Digital, a little-known Hong Kong-based fintech company, where the stock was up more than 20,000% in just two weeks. The stock is now trading at $5.60 apiece, nearly 30% lower than its initial public offering price of $7.80. Wild trading in certain individual stocks has been a reoccurrence ever since the GameStop mania of 2021 where a band of Reddit-obsessed retail investors managed to push up shares of the video game retailer and squeeze out short selling hedge funds. But VinFast's ticker VFS wasn't among the top 10 most mentions on Reddit's WallStreetBets chat room over the past 30 days, according to alternative data provider Quiver Quantitative. VinFast listed on Nasdaq on Aug.15 after its merger with Black Spade Acquisition . SPACs raise capital in an IPO and use the cash to merge with a private company, usually within two years. The SPAC market dried up over the past year as interest rates surged and regulatory pressure ramped up. The automaker has yet to make a profit. It first delivered vehicles to its U.S. buyers in March, a few months after its December target. — CNBC's Alex Harring contributed reporting.