VinFast's Rotten Day
Good morning! Welcome to the latest edition of the Vietnam Weekly, written by Vietnam-based reporter Mike Tatarski. Today’s article is exclusively for paying subscribers. If you haven’t already, you can upgrade from the free edition for US$5/month or US$50/year to receive all future subscriber-only posts plus access to the newsletter archive dating back to mid-2020.
Today’s topic is VinFast, a company I’ve written about a lot here (including as recently as April 28), but there have been significant developments since then that warrant a deeper dive. They are also the most high-profile Vietnamese company internationally - there isn’t any competition - and therefore worth ongoing coverage as Vietnam’s role in the global economy continues to advance.
On to the news.
Around 6 pm last Friday, a press release from Vingroup landed in my inbox announcing that VinFast “is ecstatic to announce that it will publicly list [in the United States] through business combination [sic] with Black Spade Acquisition Co.”
The key phrase not mentioned here is Special Purpose Acquisition Company, or SPAC. According to Investopedia, a SPAC is “a company without commercial operations and is formed strictly to raise capital through an initial public offering (IPO) for the purpose of acquiring or merging with an existing company.”
In other words, Black Spade, which is owned by Canadian-Hong Kongese casino magnate Lawrence Ho and already listed in the U.S., will ‘acquire’ VinFast so that the automaker doesn’t have to go through the rigorous public listing process.
The release claimed that VinFast will have an equity value of at least US$23 billion after this ‘business combination.’
Equity value, according to (forgive me) ChatGPT, “refers to the total value of a company's equity or ownership interest that is being offered to the public for sale. It represents the market capitalization or the total worth of a company's outstanding shares at the IPO price.”
There is no IPO price at the moment, and this deal isn’t expected to be finalized until the second half of the year, but US$23 billion is a huge number for a company that has delivered maybe 200 (at best) cars to American customers.
I’ll get into more of the business details below, but now let’s discuss what happened after that press release went out: major U.S. auto publications posted their reviews of the VinFast VF8 City Edition after a media event in California.
They were brutal.