An electric vehicle startup goes public. It’s worth more than Ford.

text size

Investors still have an appetite for electric vehicle startups backed by special purpose acquisition companies. Just look at the incredible debut of VinFast.

The Vietnamese electric vehicle maker will start life on Tuesday as a publicly traded company on the Nasdaq stock exchange after closure its merger with the SPAC

black shovel takeover

(ticker: BSAQ).

With the closing of the deal, Black Spade essentially becomes VinFast. The stock symbol changes to “VFS” from “BSAQ”.

Investors seemed elated after shareholders approved the merger on Thursday. Black Spade shares were up 73% at $18.50 apiece, but have fallen 43% since then. They are now 24 cents below where they were before the merger was approved.

Investors should prepare for more volatile trading. The stock, which closed at $10.45 on Monday, was up 7.5% in premarket trading on Tuesday. Shares opened at around $22 each, trading as low as $16 before settling at $22.13 at 11 a.m.

S&P 500

and

Nasdaq Composite

they were down 0.8% and 0.7%, respectively.

It is not clear why traders bid on SPAC-related stocks when deals are approved. Approval is a hurdle to clearing any SPAC merger, but it’s not hard to tell which deals investors like and which don’t. That makes it clear which deals are likely to pass.

It is also unclear why VinFast is worth twice as much on Tuesday as it is on Monday. All that happened was a stock price change.

The VinFast-Black Spade merger was a deal that excited investors. He valued VinFast’s stock at approximately $23 billion, more than the market capitalization of

rivian automotive

(RIVN),

lucid group

(LCD), or

automotive polar star

(NIBP). The three EV startups have some traction with investors.

At $18.50 a share, Thursday’s closing price, VinFast was valued at around $43 billion, just below

general motors

‘ (GM) market capitalization of about $ 46 billion.

At $22 per share, VinFast has a market capitalization of more than $50 billion. More than

ford engine

(F), GM and many other auto manufacturers. It’s also worth more than Rivian, Lucid, and Polestar combined.

All the wild trading should remind investors of how things were at the start of the SPAC boom.

Nicholas

(NKLA) shares doubled on June 8, 2020, just days after its merger with SPAC closed. The shares hit $79.73 a day later. They closed at $2.50 on Monday. It has been much more difficult for companies to build EV businesses than investors initially imagined.

---

Sign up for the newsletter

barron’s diary

A morning briefing on what you need to know for the day ahead, including exclusive commentary from Barron’s and MarketWatch writers.

---

VinFast, however, already has significant sales and manufacturing capabilities, two things that investors have used to differentiate EV startups. The company delivered 3,800 electric vehicles in April, the most recent month for which data is available. It is also selling electric vehicles in the US. Americans bought 740 VinFast VF8 SUVs in the second quarter.

VinFast has the capacity to build around 300,000 electric vehicles a year. It has also broken ground on a $2 billion plant in North Carolina that has a planned initial capacity of 150,000 vehicles a year.

VinFast sales in 2023 should be between 1.8 and 2 billion dollars. Sales of Rivian, Lucid, and Polestar are projected to hit $4.3 billion, $800 million, and $3.1 billion, respectively.

Now that VinFast is listed in the US, investors can expect analysts to cover the stock and issue sales and earnings estimates. Investors expect favorable projections. With a market capitalization of approximately $50 billion, VinFast is one of the most valuable electric vehicle franchises on the planet. It is also one of the most valuable car manufacturers.

Write to Al Root at allen.root@dowjones.com