GRAB - It might do what SPACs do

[Conqueror]

Original thread here: AGC, Gamma Squeeze play + possible Short Squeeze - #260

Ok, so… the long tired journey of AGC has come to an end… but now we get to stare at GRAB. Now I’m going to clarify something that I don’t think a lot of people understood the first go around:

GRAB IS OVERVALUED

Fundamentally speaking, it’s right where it should be after everything is all unlocked. The company isn’t quite worth it’s $40B valuation… yet. However, they are a tech company and tech companies often aren’t valued anything like they should be. So with that said, this is simply a setup, something that could move. It’s not something to put your life savings into, it’s not something to watch endlessly, it’s just an option… and there are probably far better options out there.

However, in the short term, there is a chance for some movement on this as a deSPAC play. I’m busy today so I’m going to cliff notes some research I did last night and expand on it later, however, the conclusion is that “good SPACs”, or rather, SPACs that target companies the market actually gives two flying fucks about generally run a little after merger. This is true for: SPCE, LCID, DKNG, SOFI, QS & OPEN and I’m sure others. Now, what I think is going on, is the same thing going on with GRAB right now… they initially cannot be traded across the market. So what happens I think, is you get a day - couple day timeframe where the stock just drifts where it is as sellers unwind slowly without much buy side support (this is also true for all those tickers, they generally drifted for a couple days and then shot up). Then, when the ticker becomes trade-able, the dynamic quickly inverses and you’re left with a fresh stock without a lot of resistance points as most everyone that wanted out is likely already out.

This thread is basically created because I know people have positions in this play and I want to keep them informed of what we’re thinking on it.

Now there is one other factor that could come into play here: The Cramer pump. Cramer has said repeatedly that he’s bullish on GRAB. To my knowledge, he has not really addressed it at this point and he’ll probably wait a couple days to do so I think, but, as that Reddit study concluded… your mans has pump power and those Boomers would love to get their hands on Asian UberEats before it becomes UberEats. Just a thought. Trade responsibly.

[Nate_Bo_Jackson]

I closed out all my Dec calls. Still have a couple for Jan & Feb

[mnlgarbe]

Thanks for your thoughts… i sell all my positions and had big losts but good to cut as soon as possible. Keep moving forward

[Bear_Chyllz]

Thanks for this perspective. I am continuing to hold 50 shares as a “let’s see what happens”.

[hansolo]

For Grab

Just as a ref, on a 1 year forward basis (EV/ '22 Rev) Uber is trading at 3.3x and Lyft is trading at 2.8x.

[Conqueror]

Playing devil’s advocate, GRAB is a bit broader of a company than Uber & Lyft to my understanding. The comparisons, while probably on the nose, could be flawed because of this.

[Taen]

Taen

1m

You’re definitely right on this.

It’s definitely more than Uber & Lyft, and probably would be catering to a much larger market as well.

Grab is doing or expanding to do food deliveries, package and grocery deliveries, financial services- payments, insurance, micro-investment and financing to consumers, micro-entrepreneurs and small businesses, in the various South-East Asian countries.

[PH1]

A loose (and likely crappy) comparison to maybe offer a different perspective but my friend was reading about other tickers like $RFL, which operates through both real estate and pharma segments; two different sectors. Recently, although, not recently anymore, $RFL reported poor/negative performance in their pharma sector (I can’t recall the news, possibly cancer-related) which caused the ticker to nosedive incredibly hard. Now its very much possible that investors put their money into RFL for the pharma aspect to begin with, rather than the real-estate.

Why is this relevant at all - possibly because Grab is trying to operate into two sectors, providing insurance, banking, and financial services - while also doubling as a ride-hailing business. I think Grab is different through, simply because Fintech or just tech in general is “booming”, despite these last few red days. I do think that Fintech, coupled with the ride-hailing aspect of the business does present a possible connection - as it was stated that new clients are signed up with bank accounts when they sign up with Grab. It is also entirely possible that if their endeavors with fintech fail, despite its success through the ride-hailing segment of their business, it can still negatively affect the price. However, we’ve had businesses that expanded through different sectors, such as Amazon, in retailing (online), web services/computing, etc. I know, its Amazon… I know most people in this discord will likely try to swing trade this on a potential run-up, if at all, but. I don’t think GRAB is a poor long hold either.

Devil’s advocate pt2

If I wanted to invest into a ride-hailing business, I’d choose one that focuses specifically does just that. If I wanted to invest into a fintech company, I’d invest in one that focuses on that. Purely to focus on one agenda/goal/strength of the company.

[BBarna]

Considering the extremely low redemption rate, and also that there are some big names among the institutional investors, I’d expect analyst ratings and price targets to come out bullish, especially around these price levels, that’s something to look forward to.

I wouldn’t be surprised if the price still drops from here though, it might be just me, but it seems like retail sentiment is pretty divided on this one.

[Conqueror]

Really appreciate this insight.

This definitely could be a concern with GRAB, more “irons in the fire” leaves more opportunity for impact from different sectors. However, it also adds to the balance sheet if it works.

I would think in the case of $RFL, the Pharma side not performing well just affected their value as a company as a whole. So while one side of the business may have been doing well, the underperformance of the other side made them “worth less” in the eyes of the market, because they’re not valued as two halves, they’re valued as a whole.

Speaking on $GRAB today, it’s held this $8.50 level for a decent amount of time now. I’ve taken a couple calls at this level, just in case it decides to move a bit in the next couple days. Keep in mind though that it’s entirely possible the market just doesn’t care about this one.

[holi]

my current position, i might average down on the stock in case we’re going to run.

[dag]

Short term thoughts - I think it could be extra risky to buy today as we don’t know which way SPY will go next week. I’ve seen talk of debt ceiling bullshittery coming back for December, so a dip like we saw in September is a real possibility and would be likely to push GRAB down a little further if investors are hesitant to dump their money in the market. Might be a safer idea to wait til Monday/Tuesday if you want to get in GRAB as a short term play.

[hansolo]

grab is interesting, it’s just the valuation which puts me off. if i were to play this at current price levels, a buy/write or selling puts would be how i would do it (like holi) just to lower cost basis and give myself a bigger margin of safety

[hansolo]

https://twitter.com/spacanpanman/status/1468244825413664774

JPM initiated coverage with PT at 12.50 (implied 23.8x '25 EBITDA multiple) - this to me looks like a priced to perfection scenario so wait till the dust settles if you’re a long term grab bull

[BBarna]

I mentioned in the previous thread that $12.50 is also the early release price point for restricted shares around the first earnings release, seems like a reasonable PT in the foreseeable future

[illi_Show_me_the_ill]

GRAB took a beating today? Any bearish news?

[Bear_Chyllz]

It was reported today (12/9/21) that Toyota Motor Corp owns 6.2% of the Class A Ordinary Shares. This news didn’t come out until after that huge knife at opening.

http://archive.fast-edgar.com/20211209/A8ZZO222Z222D2I2222B2MZ28MFPZH28L332/

[hansolo]

This is not new and already disclosed in the earlier proxy statement
https://www.sec.gov/Archives/edgar/data/1855612/000119312521335023/d197617d424b3.htm

Toyota Motor invested $1bn as part of an earlier pre-IPO round and if you take that and divide it by the 222+m shares they have, translates to a cost basis of approx $4.50 per share