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Of course!
VinFast Stock's Wild Trading Offers 5 Lessons on Market
Moves in the Vietnamese EV start-up's shares serve up lessons it can take seasoned traders years to learn.
Al Root, Aug 30, 2023
Watching the trading of Vietnamese EV start-up VinFast Auto is like a graduate-level course in the stock market, presenting lessons it typically takes seasoned traders years to learn.
The stock (ticker: VFS) fell for a second consecutive day on Wednesday, dropping 11% to close at $41.27. The S&P 500 and Nasdaq Composite rose 0.4% and 0.5%, respectively.
Only 11% is a modest move for VinFast stock. The average swing over the 12 trading days since the company merged with a special-purpose acquisition company and changed its stock symbol to “VFS” is 50%, up or down.
The first lesson is that any day’s move is basically a coin flip. VinFast stock has risen seven times and fallen five times. If investors look back to when the SPAC merger was approved, triggering a surge in volatility, the totals are eight rises and seven falls.
The second lesson is that volatility begets more volatility. When stocks jump or drop, big moves tend to follow, like aftershocks after an earthquake. Rarely do investors collectively take a stock up 255% in a day—it happened to VinFast on Aug. 15—and then decide it is perfectly valued.
Lesson three is about value. Sometimes the market doesn’t reflect the intrinsic value of an individual business.
The SPAC merger valued VinFast at about $23 billion, which is more than Rivian Automotive ‘s (RIVN) market capitalization. Rivian delivers more cars than VinFast, but $23 billion is in the EV start-up ballpark and is the level where VinFast and a group of investors felt good about a deal. At its intraday peak of $93 a share, VinFast stock was worth about $215 billion, closer to Toyota Motor (TM) than Rivian.
Wednesday’s move left VinFast with a market capitalization of about $96 billion. That moves it to the fourth-most valuable automaker on the planet, behind Porsche (P911. Germany). Tesla (TSLA) and Toyota (TM) are one and two. China’s BYD (1211. Hong Kong) is a hair behind VinFast based on data from FactSet . Ford Motor (F) and General Motors (GM) shares are worth about $94 billion combined.
The fourth lesson is there are other ways to check whether the market is being rational. Vingroup (VIC. Vietnam) owns almost 1.2 billion shares of VinFast stock, which is worth almost $50 billion, but Vingroup’s market capitalization is only about $9 billion.
It is up roughly 10% since “VFS” started trading, but the move doesn’t reflect Vingroup’s VinFast holdings. That tells investors either that there is an arbitrage opportunity in Vingroup stock or that few think the VinFast valuation is real.
The fifth lesson is that volatility attracts traders. More than 100 million VinFast shares have traded over the past 12 days. There are only about 17 million or 20 million shares not held by insiders available to trade. That means the average holding period for VinFast stock recently has been less than two days.
A final point to remember is that in the long run, cash flow and earnings will ultimately determine what VinFast stock, or any stock, is worth.
Barron's
bar, you seem overdue for your chill pill.
Here, try this:
I'll likely be adding the book to the library; even we old cooks can learn a new trick now and then. Besides: garlic and olive oil rule!
Garlicky Goodness
https://daenskitchen.com/
Bitcoin's next bull run faces plenty of headwinds
https://www.axios.com/2023/08/24/bitcoin-price-2023-2024-investing-worth-right-now
Yeah, my first thought was "CNBC clickbait." But I went along with it.
Still, Mr. Icahn’s bets haven’t always worked out for him or the target. When he joined the board of Blockbuster Video in 2005, John Antioco, then the chief executive of the company, was surprised at how little Mr. Icahn knew about the business.
“Once Carl catches the bus, I’m not sure he knows what to do with it,” Mr. Antioco said.
I have long suspected this about Carl.....
Yes, he cut quite a figure.....https://nymag.com/news/features/jordan-belfort-2013-12/
Chong apparently found Belfort to be endlessly entertaining. “The Quaalude stories are my favorite,” Chong told New York Magazine.
Why penny stocks are so risky
https://www.cnbc.com/2023/08/21/penny-stocks-scam-millions-heres-why-theyre-so-dangerous.html
Common knowledge for a time now....and I expect it to reoccur with alarming frequency....just as long as humans continue to behave like...like...well, like humans.
All very good points.....
“We are free to choose our paths, but we can’t choose the consequences that come with them.”
Short Seller Andrew Left Is Living in Fear of the Feds
https://www.bnnbloomberg.ca/short-seller-andrew-left-is-living-in-fear-of-the-feds-1.1944009
caveat emptor is not rocket science.....
Seems the Lambo missed out on all the fun.....
No, and 24/7 media is certainly not helping our 24/7 anxiety.....
"Let us keep our mouths shut and our pens dry until we know the facts."
How much longer can societies truly aspire to live by these words?
And imagine research life without a trustworthy Wikipedia.....
https://www.vice.com/en/article/v7bdba/ai-is-tearing-wikipedia-apart
“Insider trading is not a quick buck. It’s not easy money. It’s not a sure thing. It’s cheating. It’s a bad bet. It’s a ticket to prison. Because my Office, the Southern District of New York, is watching. And we’re working quickly to investigate and prosecute anyone who corrupts our financial markets. And we’ll keep at it as long as it takes. You can bet on that.”
And not just with their roast duck.....
"May we live in interesting times....."
That was my thought....or something like it.....
He was a stereotypically cautious retiree. To him, buying only rail stocks was being cautious, because he liked them so much (The financials? The romance of the industry's history?). To each his own, at least where my commissions were concerned, I thought at the time.
If you're ever able to track down BNSF's performance since Warren folded it into BRK, I'd like to know.
Yes, Slide 7. That's it. As a young man, I drooled over the design. It's not quite as compelling now, as my tastes have evolved, but it's still a head-turner. Thanks for the memory!
I've always been intrigued by Volvo cars (maybe due to my Swedish blood!), but never got around to actually owning one. What was the name of that station wagon model with the gorgeous all-glass, rounded back window? Back some 30-40-50 years ago, I think it was.....
You're likely right....and, they all pay a dividend.
Romper Room seems to have arrived to Q&A.....
To paraphrase the Wicked Witch of the West, "What a world, what a world, what a world....."
“Nothing Runs Like a Deere.”
DE? You could do worse. I continue to like AZO (even without the dividend).