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(Reuters) -Shares of Vietnamese electric automaker VinFast tumbled for a second straight session on Thursday, giving up some of the gains from the meteoric surge in its Wall Street debut that had eclipsed the market value of Ford and General Motors (NYSE:GM).
Its shares were down 13% in afternoon trading and weighed on the Nasdaq Composite. The stock slumped 19% in the previous session as the loss-making company faces an ambitious annual goal set by its founder Pham Nhat Vuong – to sell 50,000 EVs, more than twice the sales notched up so far this year.
“VinFast may well represent a new successful competitor in the EV space (but) unlike Tesla (NASDAQ:TSLA)’s entry years ago, the space is now crowded with offerings from several manufacturers,” said Rick Meckler, partner at Cherry Lane Investments in New Jersey.
VinFast had hit an eye-popping valuation of $85 billion on its first day of trading on Tuesday. That was more than three times the valuation at which it merged with a blank-check company Black Spade Acquisition, making it Asia Pacific’s biggest M&A deal this year.
The automaker has also struggled to retain senior executives and offer share-based compensation at a time when it is looking to shift to a new “hybrid model” for sales, bringing in distributors and dealers for overseas markets.
Shares of other EV firms including Lucid and Fisker that listed through blank-check deals have also fallen since their debut.
With 99% of the company controlled by VinFast’s founder, the stock’s tiny float is susceptible to more volatility. Meanwhile, its lofty valuation could be at risk as it looks to raise more capital over the next 18 months.
“The initial strong debut seems trading driven – lots of buyers chasing a limited float – and it will be difficult for the stock to maintain this valuation, particularly once more shares become available,” Meckler said.
