Increasing debts, plunging stocks, lawsuits will bury VinFast in US?

VFS shares on the first day of the week decreased by 10% compared to the end of last week, to only $3.26/share. All is caused by lawsuits by Robbins Geller Rudman & Dowd LLP. Perhaps, this law firm found VinFast’s deception, about falsely reporting or exaggerating financial difficulties, in order to attract stock investors. This law firm also warned that those who bought VinFast shares could suffer significant losses when this lawsuit begins.

In November last year, this law firm issued a notice looking for deceived customers to sue VinFast. In response, Ho Ngoc Lam – Head of the Legal Department of VinGroup and Deputy General Director in charge of VinFast legal affairs, said that “litigation is very normal and frequent in the US. We have always been ready to face this, since deciding to launch business activities in the US market.”

The US stock market develops based on transparency. Meanwhile, Vietnam’s stock market is ranked at the “frontier market” level – the lowest rank in the world stock market ranking scale. Therefore, there is a huge difference between these two markets.

In Vietnam, listed companies can use many tricks to easily deceive customers, of which the cases: Trinh Van Quyet with FLC, Do Anh Dung, Truong My Lan with SCB, are proof. In the Vietnamese stock market, investors do not have their legal rights protected like in the US stock market.

Listing on Nasdaq is an advantage, but also a big challenge for VinFast. It would be advantageous if. Pham Nhat Vuong would learn to follow the practices of global businesses. That is promoting transparency, honesty, respect for customers, etc. It will be a big challenge, and even an insurmountable challenge, if VinFast remains loyal to its unclear way of doing business, disrespecting customers and deceiving investors, as some listed businesses in Vietnam have done.

In Vietnam, investors are the ones who are deceived the most. They are prey to fraudulent “businessmen” such as Trinh Van Quyet and Do Anh Dung, because investors are not protected by anyone.

In the US stock market, there are companies such as the law firm Robbins Geller Rudman & Dowd LLP, which both monitor and detect violations of businesses, and carry out lawsuits to protect investors. It is known that these companies have a team of investigation experts, especially for SPACs like VinFast, to address risks, specifically related to companies making false declarations. If VinFast still does business like in Vietnam, it will be difficult to escape this lawsuit.

This lawsuit will last many months. But just being sued causes the stock price to plummet, not losing the lawsuit. With the prolonged lawsuit, it is enough to push VFS stock to the level of “junk stock.” It seems that VinFast’s fate has been sealed, because currently, two law firms have filed a lawsuit.

According to the report, by December 31, 2023, VinFast’s short-term and long-term debt were more than $5.8 billion and more than $2.4 billion USD, respectively – a total debt of more than $8.2 billion. By the end of 2023, VinFast’s accumulated loss is $7.7 billion. It’s worth mentioning that its loss will be higher than prevvious year’s, which means the debt block will swell even more in 2024. The figure of $8.2 billion is not the final figure.

Debt ballooning, stocks plummeting, and surrounded by lawsuits, it seems that VinFast’s fate in the US has been decided. Vuong’s “American advance” strategy is considered a complete failure. The problem is, how to get out of the US, when the company is being sued? Perhaps, American soil will be the “grave” for Vuong’s ambitious but hasty strategy.

Vuong does not rule out that the US is also a place that could bring down the entire corporation, because the current debt is very large.


Hoang Phuc –