IPOs

Grab Shares Slump After Mega-SPAC Merger

"We hope that our entrance into the global public market will help bring greater attention to the tremendous opportunity" in Southeast Asia.
Matthew HellerDecember 2, 2021

Grab delivery drivers in Bangkok

After completing a record-setting SPAC merger, ride-hailing and delivery app Grab made its trading debut on Thursday, offering investors an opportunity to bet on the Southeast Asian tech boom.

Shares in Southeast Asia’s leading “super-app” opened at $13.06, up 19% from Wednesday, when Grab was trading as its SPAC acquirer, before falling 20.5% to close at $8.75. In the extended session, the stock rose 3.4% to $9.05.

The previous day, Grab had closed a merger with special-purpose acquisition company Altimeter Growth that valued Grab at nearly $40 billion, making it the largest SPAC deal on record.

Sylvia Jablonski, co-founder and chief investment officer of Defiance ETFs, told The Wall Street Journal that the stock’s opening-day volatility could reflect some investors cheering on a popular brand going public before others factored in pandemic-related headwinds for travel companies.

“This is Southeast Asia’s time to shine, and we hope that our entrance into the global public market will help bring greater attention to the tremendous opportunity here in the region,” Grab CEO Anthony Tan said in a news release.

Grab, which was founded in 2012, acquired Uber’s Southeast Asia business in 2018. It has since expanded into a variety of other services, including food delivery, digital payments, and even financial services, as part of its push to create a super-app that will allow users to do everything from booking rides to taking out loans.

More than 25 million people now use Grab each month to make a transaction, across 465 cities in eight countries.

“Southeast Asia is among the fastest-growing regions in the world, with gross merchandise value from the digital economy climbing 49% to $174 billion this year from the previous,” Forbes said.

Grab’s revenue for the third quarter fell 9% to $157 million amid the coronavirus pandemic’s resurgence in Southeast Asia. Its net loss increased to $988 million, up from $621 million. But gross merchandise value, a metric that reflects the dollar value of transactions from Grab’s services, rose 32% to $4.04 billion.

As part of the SPAC merger, Grab also raised a record $4.5 billion in private financing from investors including Fidelity, BlackRock, and T. Rowe Price.

Photo by Lauren DeCicca/Getty Images