Why did VinFast Automotive stock plummet today?

VinFast Auto (NASDAQ resonance code: VFS)a Vietnamese automaker that went public last summer with a special-purpose acquisition company (SPAC), saw its shares plummet 11.5% as of 11 a.m. ET Wednesday after the company announced significantly lower-than-expected sales and earnings for its fiscal first quarter of 2024.

Going into the earnings release, analysts were already pessimistic, predicting a loss of $0.22 per share on sales of $450 million. As a result, analysts alsoNot enough. pessimisticThe VinFast lost $0.26 per share on sales of just $302.6 million.

VinFast Q1 Sales and Earnings (should be "Loss")

The news is not all bad (just mostly bad). Total sales for the first quarter were up 2,70% year-over-year, with auto sales revenue up 3,24%. gross margins fell from negative 1,73% to "only" negative 50%. as much as this is true, the company is still losing money at a staggering rate.

And, it may be losing momentum as well. Electric vehicle deliveries, while up 4,441 TP3T year-over-year, were down 281 TP3T sequentially in Q4 2023. electric scooters, once VinFast's main business, saw their deliveries decline both year-over-year (down 321 TP3T) and sequentially (down 731 TP3T).

Will VinFast shares be sold in 2024?

VinFast is working hard to reverse its sales decline, nearly tripling the number of U.S. distributors associated with it (to 16) and signing distributor agreements in Indonesia, Thailand and Oman.

While waiting for sales of the VF 9 to begin later this month, the company has gone back to its roots with a new e-bike that it is trying to sell in the U.S. for $2,599. The company is committed to selling 100,000 electric vehicles worldwide this year.

However, VinFast may not live to see the end of the year. It had a staggering $717.3 million in negative free cash flow in the first quarter alone, and by the company's own admission, it has only $123.3 million in the bank. At the rate it's burning through money, VinFast could be out of money and out of luck in a matter of weeks, not months.

Should you invest $1,000 in VinFast Auto Ltd. now?

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Why did VinFast Automotive stock plummet today?