Grab slumps in U.S. debut after record SPAC deal
A man walks past a Grab banner before Grab begins trading on the Nasdaq, Singapore, December 2, 2021. /CFP

A man walks past a Grab banner before Grab begins trading on the Nasdaq, Singapore, December 2, 2021. /CFP

Shares in Grab, Southeast Asia's biggest ride-hailing and delivery firm, slid more than 20 percent in their Nasdaq debut on Thursday following the company's record $40 billion merger with a blank-check company.

Grab's shares rose as much as 21 percent minutes after the listing before retreating to trade 23 percent lower at $8.51 by 1834 GMT.

"The price makes no difference to me. I'm going to celebrate tonight and get back to work tomorrow," chief executive Anthony Tan told Reuters just after the shares started trading.

The backdoor listing on Nasdaq marks the high point for the nine-year-old Singapore company that began as a ride-hailing app and now operates across 465 cities in eight countries, offering food deliveries, payments, insurance and investment products.

Grab kicked off the biggest U.S. listing by a Southeast Asian company with a bell-ringing event in Singapore, hosted by Nasdaq and Grab's executives.

CEO Tan and Tan Hooi Ling developed the company from an idea for a Harvard Business School venture competition in 2011. The two Tans are not related.

The listing comes after Grab's April agreement to merge with U.S. tech investor Altimeter Capital Management's SPAC, Altimeter Growth Corp. and raise $4.5 billion, including $750 million from Altimeter.

Read more: Can the SPAC listing frenzy be sustained?

Grab's flotation "will provide a bigger cash buffer" to its "cash burn", S&P Global Ratings said in a note. But it said the company's "credit quality continues to be constrained by its loss-making operations, and free operating cash flows could be negative over the next 12 months."

Southeast Asia's internet economy is forecast to double to $360 billion in gross merchandise value by 2025, prompting Grab's rivals, including regional internet firm Sea Ltd. and Indonesia's GoTo Group, to bulk up.

GoTo plans a local initial public offering in 2022 after completing an expected $2 billion private fundraising, sources have told Reuters. A U.S. listing will follow the Jakarta offering.

Grab's listing brings a payday bonanza to early backers such as Japan's SoftBank and Chinese ride-hailing giant Didi Chuxing, which invested as early as 2014.

They were later joined by the likes of Toyota Motor Corp., Microsoft Corp. and Japanese megabank MUFG. Uber became a Grab shareholder in 2018 after selling its Southeast Asian business to Grab following a five-year battle.

Source(s): Reuters

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