$VinFast Auto(VFS)$ 60% Wiped Out Within A Week
Shares of the Vietnamese EV maker fell 15.9% to $34.71 Thursday while the S&P 500 fell 0.2% and the Nasdaq Composite gained 0.1%. It was the third consecutive decline. Shares are now down about 63% from an intraday high of $93
reached on Monday.
Lower low since last Wednesday
Declines leave VinFast's market capitalization at about $81 billion, making it the fifth most valuable automaker on the planet behind Tesla (TSLA), Toyota Motor (TM), Porsche (P911. Germany) and BYD (1211. Hong Kong). At $93 a share, VinFast shares were worth some $215 billion just last week.
The rapid decline hasn't been a boon to short sellers, who bet on stock price declines by borrowing shares they don't own and selling them, hoping to buy them back later at a lower price but highly risky to catch a falling knife.
Better to wait for performance data
There are just a few shares sold short. VinFast "short interest is $4.9 million, 119 thousand shares shorted," says short selling research firm S3 Partners managing director Ihor Dusaniwsky.
With that level of stock sold short, total profits if traders timed things perfectly over the past three days is less than $7 million. "There are just slivers of stock available to borrow," adds Dusaniwsky. "20,000 to 30,000 shares at a level around the 350% fee range."
Short sellers have to actually borrow shares. Sometimes there are none to borrow. And when they borrow stock they typically have to pay something to borrow it. A borrow rate of 350% means that a short seller would have to pay 3.5 times the stock price, annually, in interest to the original holder to borrow the shares. It's like an APR for short selling. Borrow rates that high really eat into short sellers' potential profits.
One more gap to fill this week?
For automotive investors, the lesson is to be careful. Trading activity will die down eventually and it will be easier to buy shares based on a fundamental outlook. For the rest of the market, VinFast trading is just entertaining to watch.
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Modify on 2023-09-05 13:54
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10% premium is on top of stock going 50% down from current level ($30 to $15). I have a strange feeling that it will be assigned to me despite being way too far OTM. I have not seen so much irrationality in the market.
Vinfast does not sell many electric cars. They set up a taxi company and flooded the streets of Vietnam with taxis to reduce their inventory and they called it sales.
VFS claimed 3rd largest auto company in the world. VFS 14,500 employees. Toyota 366K; Honda 197K; Ford 173K; GM 167K. Over-priced VFS pumped & dumped, continues going DOWN
Vinfast faces tough competition with no clear advantages: price tag, battery range, charging time, and reliability all fall short. Yet, they're determined to challenge global EV competitors. 😂
news and comunist VN blow up Vinfast as Superman but the truth is nothing, then now they are only junk cars of the world
Stop rejecting my messages. I’ve not talked trash or intimidated anybody. Just want to reveal ugly truth about Vinfast
VFS is going crazy high right now...waiting for a free fall.
Competition is good for the consumer. Hopefully this company survives.