As Southeast Asia’s biggest ride-hailing and delivery firm, Grab made its debut in Nasdaq on Thursday, its shares crashed over 20 percent, following its record $40 billion merger with a blank-check company.
According to stock market reports, the ride-hailing company’s shares just minutes after the listing rose as much as 21 percent before retreating to trade 23 percent lower at $8.51 by 1834 GMT.
The nine-year-old Singapore company’s backdoor listing on Nasdaq marks the high point that began as a ride-hailing app and now operates across 465 cities in eight countries, payments, insurance, offering food deliveries, and investment products.
The company was developed by Chief Executive Anthony Tan and Tan Hooi Ling merely from an idea for a Harvard Business School venture competition in 2011.
According to reports, the listing comes after the company in April had entered an agreement to raise $4.5 billion through a merge with U.S. tech investor Altimeter Growth Corp., Altimeter Capital Management’s SPAC, inclusive of $750 million from Altimeter.
S&P Global Ratings on the company’s market debut commented that its flotation will provide a bigger cash buffer then compared to its cash burn. However, it also said that the company’s credit quality continues to be constrained due to its loss-making operations. It expects Grab’s free operating cash flows over the next 12 months could be negative.
The Southeast Asia’s internet economy by 2025 is expected to double to $360 billion in gross merchandise value. Thus prompting the company’s rivals, including regional internet firm Sea Ltd and Indonesia’s GoTo Group, to bulk up.
The Indonesian GoTo had earlier announced its plans for a local IPO in 2022 after it completes an expected $2 billion private fundraising.
According to Grab’s regulatory filling, in September, it had cut its full-year adjusted net sales forecasts, due to renewed uncertainty over pandemic curbs on movement.
While its third-quarter revenue declined 9 percent from a year earlier and its adjusted loss before taxes, depreciation, interest, and amortisation (EBITDA) broadened 66% to $212 million.
The company is aiming to turn profitable on an EBITDA basis in 2023.