There are a number of plausible explanations for why GRAB stock has not been well-received by investors. For starters, growth estimates for the Southeast Asian region have been lowered recently primarily due to the coronavirus pandemic.
Full Answer
Why is grab stock down after-hours?
The company also lost $1.1 billion during the period, which it largely attributed to the costs of going public in the United States during its blockbuster initial public offering last year. Grab's stock was down 0.9% in after-hours trade on Thursday, at about $3.28.
Why is Grab Holdings stock tumbling today?
Shares of Grab Holdings ( GRAB -5.61% ) were tumbling today after the Southeast Asian ridesharing and food delivery company posted disappointing results in its fourth-quarter earnings report. As a result, the stock closed down 37.3%.
What happened to grab’s food delivery business?
Revenue from Grab’s delivery unit, which focuses on food delivery services in countries including Singapore and Malaysia, was almost wiped out, plunging 98% as the company poured money into incentives to retain its market leader position, and more people dining out hurt demand.
Why did grab’s revenue fall 44%?
Despite the increase in use, revenue actually fell 44% to $122 million as Grab added incentives to increase its supply of drivers ahead of an expected rebound in demand as the pandemic fades. The sharp decline in revenue seemed to be unexpected, but there were no analyst estimates available for comparison.
Why Grab stock keep dropping?
Revenue from Grab's delivery unit, which focuses on food delivery services in countries including Singapore and Malaysia, was almost wiped out, plunging 98% as the company poured money into incentives to retain its market leader position, and more people dining out hurt demand.
Is Grab stock a good buy?
Grab still can't be considered a value play Grab's high price-to-sales ratio makes it a tough stock to recommend in this challenging market.
What happened grab?
Grab, like other ride-hailing and delivery app makers, has lost a lot of money since its founding in 2012: It had accumulated losses of $11.9 billion as of June 2021, according to its prospectus. The company recently reported a third-quarter net loss of $988 million, an increase of $366 million year over year.
Is Grab failing?
Grab has never been profitable. But that is not unusual for a start-up. In the final three months of 2021, Grab reported a net loss of US$1.1 billion, almost double the losses in the same period a year earlier. Its annual loss of US$3.4 billion surpassed the US$2.6 billion in 2020.
Does Grab give dividends?
Does Grab pay dividends on its stock? We do not currently pay dividends on our stock.
Is Grab losing market share?
Like Sea, Grab is also losing money: $2.75 billion in 2020 and $3.56 billion in 2021, much of it from incentives paid out to attract more customers and drivers. Grab, in partnership with Singtel, was also recently awarded a digital banking license by MAS.
Is Grab better than Uber?
Grab was so successful at beating out Uber because of its strong focus on the local market. In addition, they adapted to the different cultures and languages in each country they expanded into, which helped them gain a lot more users than Uber ever did.
Summary
Southeast Asian company Grab launched its public debut last week, but the price drastically fell, and it currently has a market cap of about $35 billion.
The Company Problem
Grab is at its core a ridesharing company and debuted as a taxi app in Malaysia in 2012. But like Uber, it aims to be so much more. The company states in its prospectus that:
The Financial Problem
Those discounts and cutthroat rates will be a further problem given Grab's financial situation. The good news is that Grab grew dramatically in over the past year. It reported a revenue of $396 million in the first half of 2021, a 406% growth compared to the same period in 2020.
The Final Problem
Ridesharing companies have not been good investments so far, with Uber and Lyft both falling below their IPO price. But even those companies, warts and all, are still much better investments than Grab.
