VinFast Auto(NASDAQ: VFS) is taking its investors on a roller-coaster ride.
One day after shares of the Vietnamese automaker soared 30% on news of a car-charging partnership with Germany's Bosch, VinFast shares skidded 9% (through 10:35 a.m. ET Tuesday) on reports that the National Highway Traffic Safety Administration (NHTSA) is investigating VinFast's role in a car crash "that killed a family of four."
TechCrunch breaks the bad news on VinFast
TechCrunch has the details: On the evening of April 24, a California family borrowed a friend's all-electric VinFast VF8 SUV and lost control of the vehicle, crashing into a tree. The vehicle caught fire, and all inside perished. Previously, the car's owner had complained that its vehicle assistance software sometimes "jerked the vehicle to the right" -- a complaint similar to what others have said about the VF8 SUV.
Reporting this morning, TC says the NHTSA has assigned its Special Crash Investigations division to "document the crash circumstances and the ensuing fire."
Is VinFast stock a sell?
Long story short, a VinFast EV crashed. It's not known whether the fault lies with the company or the driver -- but either way, VinFast stock really didn't need the negative PR.
Since announcing its focus on EVs two years ago, VinFast has embarked upon a pell-mell rush to develop and sell electric cars. Media critiques of the results abound -- including this epic tome from Jalopnik, which concluded: "No, the [VinFast VF8 is] not very good at all."
I must say that the stock doesn't look very good, either.
Valued at just under $15 billion, VinFast stock lost $2.3 billion last year, and burned $3 billion in cash. It's got less than $117 million in the bank at last report -- and $3.1 billion in debt. Even the most optimistic analysts don't see VinFast turning profitable before 2031 at the earliest and, to be perfectly blunt, the company lacks the cash to carry it so far.
It's probably impolite to call any stock "doomed," but VinFast stock really looks that way to me.
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Rich Smith has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.
