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My view about GRAB IPO
14 Apr 2021 (743 views)

The ride hailing platform GRAB will be listing its shares in New York through a SPAC (special purpose acquisition company). Here are some details about the listing. 

https://www.straitstimes.com/business/companies-markets/grab-to-go-public-in-us-through-s532-billion-deal-with-altimeter-in   

After listing, the market valuation of GRAB will be $39.6 billion USD.

In the table below, I show the financial performance of UBER. It showed a small profit of $1.0 billion in 2018 and a total loss of $19.2 billion in 2017, 2019 and 2020. Its market capitalization is $113 billion (i.e. 3 times of GRAB).

I do not know the financial performance of GRAB but I suspect that it should be similar to UBER.

Will UBER and GRAB become profitable in future years, after the economy recover from the pandemic?

The ride hailing platforms face the following risks:

a) The regulators will control their operations to ensure fairness in competition with the traditional taxis.

b) They face the risk of autonomous taxis, which are now being developed by Tesla and other operators.

Given the poor financial performance and the large risks, I am not keen to invest in GRAB or UBER. 

However, it is usual for market participants to push up the prices of stocks for a few days after IPO. I prefer to keep out of this frenzy.

Note - I am giving a personal opinion. Do not treat this as "financial advce",

Tan Kin Lian


My view about GRAB IPO
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The ride hailing platform GRAB will be listing its shares in New York through a SPAC (special purpose acquisition company). Here are some details about the listing. 

https://www.straitstimes.com/business/companies-markets/grab-to-go-public-in-us-through-s532-billion-deal-with-altimeter-in   

After listing, the market valuation of GRAB will be $39.6 billion USD.

In the table below, I show the financial performance of UBER. It showed a small profit of $1.0 billion in 2018 and a total loss of $19.2 billion in 2017, 2019 and 2020. Its market capitalization is $113 billion (i.e. 3 times of GRAB).

I do not know the financial performance of GRAB but I suspect that it should be similar to UBER.

Will UBER and GRAB become profitable in future years, after the economy recover from the pandemic?

The ride hailing platforms face the following risks:

a) The regulators will control their operations to ensure fairness in competition with the traditional taxis.

b) They face the risk of autonomous taxis, which are now being developed by Tesla and other operators.

Given the poor financial performance and the large risks, I am not keen to invest in GRAB or UBER. 

However, it is usual for market participants to push up the prices of stocks for a few days after IPO. I prefer to keep out of this frenzy.

Note - I am giving a personal opinion. Do not treat this as "financial advce",

Tan Kin Lian