The stock rose 21% minutes after listing before trading at $8.51, down 23% by 1834 GMT.
“Price doesn’t matter to me. I’m going to celebrate tonight and get back to work tomorrow,” Chief Executive Anthony Tanu told Reuters just after the start of trading in the shares.
Backdoor listing on Nasdaq marks high point for nine-year-old Singapore The 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-ever US listing by a Southeast Asian company with a bell-ringing event in Singapore, hosted by Nasdaq and Grab executives. The event was attended by about 250 people, including its investors, drivers, businessmen and employees, many of whom wore green clothing bearing the company’s signature. The rumble of thunder in the hotel ballroom as an emotional tan thanked him for putting Grab and Southeast Asia’s tech economy on the global map.
CEO Tan and tan o ling The company developed from an idea for the Harvard Business School enterprise 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 special-purpose acquisition company, Altimeter Growth Corp., and raise $4.5 billion, including $750 million from Altimeter.
Grab’s floatation will “provide a larger cash buffer” for its “cash burn,” S&P Global Ratings said in a note. But it said the company’s “credit quality is hampered by its loss-making operations, and free operating cash flow could be negative over the next 12 months”.
Southeast Asia’s internet economy is projected to double in gross trading value to $360 billion by 2025, prompting Grab’s rivals, including regional internet firm Si and Indonesia’s Goto Group, to bulk up. Sources said Goto plans a local IPO in 2022 after meeting its expectation of a $2 billion private fundraising. A US listing would follow Jakarta’s offer.
“Long-term, we are really excited about Grab Financial Group,” said Chris Conforti, partner at Altimeter Capital, referring to Grab’s financial services arm. “I guess that’s what the bell curve results in, but it could be huge.”
Bonanza for supporters
CEO Tan, 39, expanded Grab into a regional operation with a range of services, after launching it as a taxi app in Malaysia in 2012. Later its headquarters shifted to Singapore.
“What we’ve shown the world is that domestic tech companies can develop great technology that can compete globally, even when international players are in town,” Tan told Reuters in an interview on Wednesday. “We can compete and win.” He would control 60.4% of the voting rights, along with Grab’s cofounder and chairman Ming Ma, but he would only have a 3.3% stake.
Grab’s listing brings a payday bonus to early backers such as Japan’s SoftBank and Chinese ride-hailing giant Didi Chuxing, which invested in early 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 after a five-year battle.
In September, Grab cut its full-year adjusted net sales forecast, citing renewed uncertainty over the pandemic over movement. Third-quarter revenue declined 9% compared to a year ago, and its adjusted loss before interest, taxes, depreciation and amortization rose 66% to $212 million. GMV grew to a record $4 billion in the quarter. It aims to become profitable based on EBITDA in 2023.
JPMorgan and Morgan Stanley were the principal placement agents for fundraising, while Evercore and UBS were co-placement agents.
Noor Zainab Hussain of Reuters in Bengaluru contributed to this story.