SoftBank-Backed Grab Stocks, Biggest SPAC Ever, Collapse. Dating app and IPO Miracle Bumble Crashes
As the market continues to unravel stock by stock.
By Wolf Richter for WOLF STREET.
On today’s menu of imploded actions are two extra-specials:
- The biggest SPAC of all time, ridesharing and food delivery app Grab Holdings, crashed 37% today, taking the collapse to 81% in the four months since its introduction in stock exchange;
- Dating IPO stock Bumble crashed 16% today, taking its total slump to 77% since peaking just after its February 2021 IPO, the now infamous month when highs thieves began to peel off, action by action.
Grab backed by SoftBankSoutheast Asia’s largest ridesharing and food delivery app, is headquartered in Singapore and went public through a merger with a US-based SPAC and trades on the Nasdaq.
The SPAC merger was announced in April 2021 and approved by SPAC shareholders on November 30, 2021. The deal valued the company at $40 billion, making it the largest SPAC deal ever.
Shares of SPAC, which traded on Nasdaq before the merger under a different symbol, began trading under [GRAB] on December 2, 2021.
Today take reported earnings for the first time as a publicly traded company, namely a colossal loss of $1.06 billion for the fourth quarter, nearly double the loss from a year ago. For the full year, Grab lost an inexplicable $3.45 billion, compared to a loss of $2.61 billion the previous year.
How can you lose $6.1 billion in two years delivering food and driving people around? It was a rhetorical question.
Revenue fell 44% to $122 million in the fourth quarter; and for the full year by 44% to $675 million. As you’d expect, there’s a big yada-yada-yada story to make this fiasco better, including that the company spent a huge amount on incentives, discounts and promotions to get consumers to use its services and to get the conductors to do the work. These incentives are deducted from income.
On news of the explosion in losses, shares are down 37% today and are down 81% from their peak on November 12, 2021, just before the SPAC merger was completed. The SPAC boom that started in 2020 has, as everyone knew, turned into one of the big scams (data via Y-Charts):
Bumble dating app [BMBL] went public via IPO in February 2021 amid huge hype. The IPO price was set at $43 per share. The first trade on Feb. 11 was at $76 per share. The shares rose to $79.60 during the day and closed at $70.31. On the second day of trading, February 12, the stock hit an intraday high of $84.80, giving it a market capitalization approaching $10 billion. And that was it. The shares have since fallen.
Today, shares plunged another 15.7% during regular trading and 2.5% after hours to $19.00. The shares are now down 78% from the high the day after the IPO. Bumble didn’t even report its earnings.
It may now be that trading app jockeys and algos are wringing their hands and worrying that Bumble’s exposure to Russia and Ukraine – it’s not huge: JP Morgan estimated that they could account for 3% to 4% of Bumble’s revenue – may cause the company to issue potentially reduced guidance when it reports results on March 8.
This is the kind of chart where the crazy stock market hype of the past two years comes back:
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