Grab postpones Nasdaq IPO as it eyes Q4 as target date

Property Invest in Cambodia-The company postponed its initial public offering on the Nasdaq last week after it agreed to a reverse acquisition with Altimeter Growth Corp (AGC) at a valuation of approximately $40 billion.

“We decided to be proactive,” Anthony Tan, Grab’s chief executive officer, told Bloomberg. “We wanted to set the bar in transparent financial reporting. It may have taken a little longer than we expected.”

The listing sets the stage for the largest debut of a Southeast Asian company on a US exchange sometime in the fourth quarter, according to Tan.

Grab registered 1.9 billion transactions last year and averaged 26 million monthly transactions across all services.

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The Singapore-based company has expanded beyond its ride-hailing roots to include food deliveries, payment solutions and insurance.

Last year, Grab was awarded a digital banking license after it partnered with Singtel Communications Ltd. Singtel is believed to hold 60 percent of the banking business.

Its fintech ecosystem is reported as being crucial to its valuation. Its financial services raked in $8.9 billion in revenue last year. In contrast, deliveries raised $5.5 billion and mobility brought in $3.2 billion.

The firm forecast for a 42 percent compound annual growth rate until 2023, filings to the US Securities and Exchange Commission revealed.

Grab’s value-to-sales ratio is more than double those of Uber and Lyft Inc, which Bloomberg Intelligence says gives it “scant wiggle room for missteps”.

Shares of AGC shot up to $15.33 on the US bourse after the special purpose acquisition company (SPAC) deal was announced but have fallen significantly after the US Securities and Exchange Commission (SEC) announced they would scrutinise reverse merger listings.

SPACs raised a record $82.1 billion last year with more than 200 acquisitions, far surpassing 2019’s figures with 59 reverse acquisitions worth $13.6 billion.

“Shareholder advocates – as well as business journalists and legal and banking practitioners and even SPAC enthusiasts themselves – are sounding alarms about the surge,” John Coates, acting director for the Division of Corporate Finance at the SEC, said in April.

The SEC has said that it will more closely audit reverse mergers to protect investors.

Already, new accounting rules have forced SPACs to resubmit filings after it was ordered that those companies must account for warrants – securities or benefits issued to early investors – as liabilities rather than equities.

“I heard about Grab [from a friend in Cambodia] and how he was using it every day to get to work. I bought in even though he told me to keep my money out of the company. I figured that any company that can take out a giant like Uber had to have something special going for it even though I have never used it myself,” Canadian investor and holder of AGC shares David Hanes told Khmer Times.

Hanes claimed that he made six figures last year investing in meme stocks and SPACs last year starting with a capital of about $10,000.

He advised against his trading strategy saying that his style is “completely idiotic and symbolic of the dysfunctional mindset in 2020”.

“If SPAC investors are any good at what they do, they always just ‘sell the news’ and move onto something else because there’s always a lot of hype after the symbol changes. There’s no shame in walking out of a casino with cash in your pocket,” Hanes added.

Shares of AGC were trading 0.51 percent higher at $11.80 a share ahead of market open in New York as of 4:30pm ICT.