[Asia Economy Reporter Kwon Jae-hee] "Southeast Asia's Uber," Grab, lost face as its stock plunged 20% on its first day of trading on the Nasdaq. Despite not turning a profit, Grab was valued at $37 billion through a SPAC (Special Purpose Acquisition Company) merger based solely on expectations, but the stock's sharp decline on the first trading day wiped out $2 billion in value. Some warn that this signals the bursting of the overheated SPAC bubble.
According to CNBC on the 2nd (local time), Grab, which began trading on the Nasdaq in New York, opened at $13.06 per share. Grab's stock price initially rose about 19% but then plunged 20% to close at $8.75, reducing its market value to $35.1 billion (approximately 41 trillion KRW).
Despite poor performance, Grab leveraged investors' strong interest in Southeast Asia's digital innovation to complete the world's largest SPAC deal.
Since its founding, Grab has consistently accumulated losses, recording a $11.9 billion loss as of June this year. In the third quarter, it posted a net loss of $988 million, an increase of $366 million compared to the same period last year. Nevertheless, Grab was valued at $37 billion through the SPAC merger. According to Dealogic, this is the largest valuation ever for a SPAC merger.
Lily McGonagle, an analyst at Renaissance Capital, said, "Grab's case clearly shows that SPACs have been excessively overvalued," adding, "This is a signal that SPACs will undergo a correction in the future."
In response, Grab explained that this is a temporary adjustment due to COVID-19 and that it will continue steady growth and recovery. Peter Wee, Grab's Chief Financial Officer (CFO), said, "We faced difficulties due to COVID-19 lockdowns in the third quarter," but emphasized, "Despite new COVID-19 variants such as Omicron, Grab will continue its growth and recovery."
Wee also added, "Grab is the only super app in Southeast Asia," noting, "It is related to every aspect of consumers' lives, from ride-hailing to grocery delivery and financial services."
Meanwhile, Grab, headquartered in Singapore, was founded in 2012 and currently provides ride-hailing, delivery, and financial services in over 400 cities across Southeast Asia. Major investors in Grab include SK, Hyundai Motor Company, SoftBank Group's Vision Fund, Didi Global, and Toyota.
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