VinFast Auto Ltd., the Vietnamese electric vehicle manufacturer, experienced a rapid rise and subsequent fall in its stock price, resulting in a significant setback for its founder’s fortune.
Following an impressive 255% surge on its debut day of trading on the Nasdaq Global Select Market, VinFast’s stock has tumbled over the course of three consecutive trading days, erasing more than half of its initial gains.
Pham Nhat Vuong, the billionaire chairman and founder who holds a substantial majority of the company’s shares, has seen his net worth plummet by approximately 53%, now standing at $21 billion, according to the Bloomberg Billionaires Index.
Concurrently, VinFast’s market capitalization has also undergone a sharp decline, dropping from its pinnacle of $85 billion to its current value of $37.4 billion. This dip occurred despite a brief moment when VinFast’s market cap exceeded that of General Motors Co., despite VinFast’s projections indicating lower sales for the year than GM achieves in a single week.
These fluctuations are unsurprising given Vuong’s overwhelming control of VinFast’s stock—99% of it, mainly through his conglomerate Vingroup JSC. This leaves only a fraction available for other investors, making even minor transactions capable of triggering substantial price fluctuations.
Notwithstanding these recent developments, Vuong’s financial standing remains robust. The Bloomberg index had not incorporated his VinFast stake until after the company’s merger with a blank-check entity earlier this week.
Consequently, he still retains a significantly higher net worth compared to his pre-listing status. During the initial trading day, he accrued an on-paper gain of nearly $40 billion, marking one of the most remarkable wealth surges documented by the index.
Other similar incidents
Similar scenarios of rapid shifts in billionaire status following stock listings are evident across various industries. In September 2020, Frank Slootman, the CEO of Snowflake, a cloud data storage firm, achieved billionaire status through a groundbreaking IPO.
As Snowflake’s shares surged by 111% on its inaugural trading day, Slootman’s stake was valued at nearly $1.9 billion. Subsequently, Snowflake’s stock price receded by over 50% from its peak, leading to a decreased net worth of approximately $1.1 billion.
In February 2021, Whitney Wolfe Herd, CEO and co-founder of Bumble, a pioneering dating app, joined the league of the world’s youngest self-made female billionaires at age 31, post the company’s IPO. With Bumble’s shares witnessing a surge of over 63% on the debut trading day, Wolfe Herd’s stake ascended to a valuation of about $1.5 billion. However, Bumble’s stock encountered a decline of over 40% from its peak, resulting in a reduced net worth of roughly $1.3 billion.
Similarly, Pan Dong, chairwoman of China’s Blue Moon Group Holdings, solidified her position on the Forbes World Billionaires list with a net worth of $8.3 billion. Holding approximately 70% ownership of the company, Pan Dong achieved a successful public offering in Hong Kong in December 2020.
Although the stock experienced an initial rise of over 30% on the first trading day, it subsequently plummeted by more than 80% from its peak, leading to a decreased net worth of around $1.6 billion.
These instances collectively highlight the pattern of swift elevation to billionaire status, often followed by subsequent declines, emphasizing the inherent volatility within the stock market. This underscores the precarious nature of sudden wealth accumulation through stock listings across diverse sectors.
