Taking Cue From Uber, Lyft, Grab Eyes US Listing Via SPAC Deal

Source:ANDRANIK HAKOBYAN, Shutterstock

Summary

  • Singaporean ride-hailing company to announce a SPAC merger for US listing.
  • The deal could value Grab at US$35 billion.
  • Lyft and Uber saw their stocks recover in 2020 despite reporting losses.

Singaporean ride-hailing firm Grab may announce a merger with a special purpose acquisition company (SPAC) as early as this week amid talks to take the business public in the US.

Grab is looking to merge with one of the SPACs of Altimeter Capital Management LP in a deal that values the company at US$35 billion. It will be the largest merger between a private company and a blank-cheque firm in the US.

Morgan Stanley and JPMorgan are the lead advisors to the deal. Founded in 2012, Grab is backed by several well-known firms such as Japan’s SoftBank Group Corp. Besides its ride-hailing business, the company also operates a food delivery operation and payment solution. So far, Grab has raised US$12 billion, with cash reserves of about US$5 billion.

Grab’s peers Uber Technologies, Inc. (NYSE: UBER) and Lyft, Inc. (NASDAQ: LYFT) had also taken the IPO route a few years ago.

Source: Pixabay

Lyft

The California-based firm made its stock market debut in March 2019 with an offering price of US$72 per share. The stock, however, plunged around 68 percent in the first year. But in the last 12 months, the stock price shot up 135 percent despite the company’s reported losses in 2020.

Lyft has been reporting losses since its inception. The company posted a net loss of US$900 million in 2018 and US$2.6 billion in 2019 while it lost US$1.8 billion in 2020. For the year ended Dec. 31, 2020, Lyft’s revenue fell 35 percent to US$2.4 billion from US$3.6 billion in 2019.

Uber

Uber, which runs a variety of businesses, including ride-hailing, food delivery, package delivery, couriers, and freight transportation, went public in 2019 with an offering of US$45 per share.

The shares slumped 20 percent in the first year. However, the stock recovered in the second year and is now trading at around US$58. The company lost US$8.5 billion in 2019 and US$6.7 billion in 2020.

Uber's revenue during the year ended Dec. 31 came in at US$11.1 billion, down 14 percent year-over-year as the company’s bookings declined 27 percent to 5,025.

Image Source: Refinitiv, Daily share price of Uber, Lyft in two years.


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