Grab Floors On The Nasdaq Exchange, Has Soared But Finally Shares Value Drops 20 Percent

Grab continues to expand its business. (photo credit: pixabay)

JAKARTA - Shares of Grab, Southeast Asia's largest transportation and delivery company, fell more than 20 percent in its Nasdaq stock exchange debut on Thursday, November 2 following the company's record $40 billion merger with a blank check company set up to seek new funding. .

Shares of Grab were up as much as 21% in the first minute after listing before retreating to trade 23% lower at $8.51 per share at 1834 GMT.

"Price makes no difference to me. I'm going to celebrate tonight and get back to work tomorrow," Grab Chief Executive Anthony Tan told Reuters shortly after the stock started trading.

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

Grab kicked off the largest US listing by a Southeast Asian company with a “bell ring” event in Singapore, hosted by Nasdaq and Grab executives.

The event was attended by around 250 people including investors, drivers, traders and employees, many wearing the company's signature green attire.

Thunderous applause resounded in 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 company from an idea for a Harvard Business School business competition in 2011. The two Tans are not related.

The list comes after Grab's April deal to join US technology investor Altimeter Capital Management SPAC, Altimeter Growth Corp and raise $4.5 billion, including $750 million from Altimeter.

Grab's flotation "will provide a greater cash buffer" for its "money 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 flow could be negative over the next 12 months."

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

GoTo is planning a local IPO in 2022 after completing a $2 billion private fundraiser, a source told Reuters.

“In the long term, we are very pleased with the Grab Financial Group,” said Chris Conforti, partner at Altimeter Capital, referring to Grab's financial services unit. "I think that bell curve is much wider in terms of what the outcome is, but it can be huge."

CEO Tan, 39, expanded Grab into a regional operation with multiple services, after launching it as a taxi app in Malaysia in 2012. It then moved its headquarters to Singapore.

"What we have shown the world is that domestic technology companies can develop great technology that can compete globally, even when international players are in the city," Tan told Reuters in an interview on Wednesday. "We can compete and win."

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