Grab in Southeast Asia collapses on US debut after record-breaking deal with PSPC

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  • Grab listed on Thursday after $ 40 billion deal with Altimeter
  • Debut Marks Largest Listing in the United States by a Southeast Asian Company
  • Early backers SoftBank and Didi brace for payday bargain
  • The ringing ceremony takes place in Singapore

SINGAPORE, Dec.2 (Reuters) – Shares of Grab, Southeast Asia’s largest rideshare and delivery company, fell more than 20% when they debuted on Nasdaq on Thursday following the merger The company’s $ 40 billion record with a blank check company.

Grab shares rose 21% within minutes of listing before falling to trade down 23% to $ 8.51 in 1834 GMT.

“The price doesn’t make any difference to me. I’m going to party tonight and get back to work tomorrow,” Managing Director Anthony Tan told Reuters just after trading in the shares began.

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The backdoor listing on the Nasdaq marks the culmination of the nine-year-old Singaporean company which started as a rideshare app and now operates in 465 cities in eight countries, offering food deliveries, payments, insurance and investment products.

Grab kicked off the largest US listing of a Southeast Asian business with a ringing event in Singapore hosted by executives from Nasdaq and Grab.

The event brought together around 250 people, including its investors, drivers, traders and employees, many wearing the company’s green signature.

Thunderous handclaps echoed through the hotel ballroom as an emotional tan thanked them for putting Grab and Southeast Asia’s tech economy on the global map.

CEO Tan and Tan Hooi Ling developed the business from an idea for a business competition at Harvard Business School in 2011. The two Tan’s are not related.

The listing comes after Grab’s April deal to merge with US tech investor Altimeter Capital Management’s SPAC, Altimeter Growth Corp (AGC.O) and raise $ 4.5 billion, including $ 750 million in Altimeter.

Grab’s IPO “will provide a bigger cash buffer” to its “cash burn,” S&P Global Ratings said in a note. But he said “the company’s credit quality continues to be constrained by its loss-making operations and free operating cash flow could be negative over the next 12 months.”

Southeast Asia’s internet economy is expected to double to $ 360 billion in gross merchandise value by 2025, prompting Grab’s competitors including regional internet company Sea Ltd (SE.N) and the Indonesian group GoTo, to strengthen.

GoTo is planning a local IPO in 2022 after achieving an expected private fundraiser of $ 2 billion, sources told Reuters. A listing in the United States will follow the Jakarta offer.

“Longer term, we’re really excited about Grab Financial Group,” said Chris Conforti, partner at Altimeter Capital, referring to Grab’s financial services unit. “I think the bell curve is a lot wider in terms of a result, but it could be extremely important.”

BONANZA FOR PARTICIPANTS

CEO Tan, 39, expanded Grab into a regional operation with a range of services, having launched it as a taxi app in Malaysia in 2012. He then moved his headquarters to Singapore.

“What we’ve shown the world is that local tech companies can develop cutting edge technology that can compete globally, even when international players are in town,” Tan told Reuters in an interview. Wednesday. “We can compete and win.”

He will control 60.4% of the voting rights with Grab co-founder and chairman Ming Maa, but will hold only a 3.3% stake with them.

Grab’s list brings a payday boon to early funders such as Japan’s SoftBank (9984.T) and Chinese ridesharing giant Didi Chuxing, which invested as early as 2014.

They were later joined by Toyota Motor Corp (7203.T), Microsoft Corp (MSFT.O) and the Japanese mega-bank MUFG (8306.T). Uber became a shareholder of Grab in 2018 after selling its Southeast Asia business to Grab after a five-year battle.

In September, Grab lowered its adjusted net sales forecast for the full year, citing new uncertainty over pandemic restrictions on movement.

Third quarter revenue fell 9% from a year ago and its adjusted loss before interest, taxes, depreciation and amortization (EBITDA) widened 66% to $ 212 million. GMV during the quarter hit a record high of $ 4 billion.

It aims to become profitable on the basis of EBITDA in 2023.

JPMorgan and Morgan Stanley were the primary placement agents for fundraising, while Evercore and UBS were the co-placement agents.

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Reporting by Anshuman Daga and Aradhana Aravindan; Additional reporting by Noor Zainab Hussain in Bangalore; Editing by William Mallard, Kirsten Donovan, Emelia Sithole-Matarise and Susan Fenton

Our Standards: Thomson Reuters Trust Principles.


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