Altimeter Growth Corp., the blank-check company merging with internet giant Grab Holdings Inc., is hovering just a few cents above its record low after cratering 28% since the deal was unveiled in April.
Altimeter closed Thursday at $11.06, just shy of its $10.98 historical trough. That selloff came after Southeast Asia’s most valuable startup announced a deal on April 14 with the special purpose acquisition company of Brad Gerstner’s Altimeter Capital Management to go public in the U.S. by July, in the largest-ever merger with a blank-check company.
The Singapore-based ride-hailing and delivery startup is set to have a market value of about $39.6 billion through the combination with Altimeter, the companies said at the time of the announcement. It’s raising more than $4 billion from investors including BlackRock Inc., Fidelity International and T. Rowe Price Group Inc. as part of the biggest U.S. equity offering by a Southeast Asian company. Grab declined to comment on Friday.
“SPACs have seen a bit of selloff so it reflects the general sentiment,” said Angus Mackintosh, founder of CrossASEAN Research. The share price at current levels won’t make a big difference from Grab’s listing perspective, he added. “It just means profits your SPAC owners would realize are diluted to some extent. They have effectively locked in cornerstone investors at a $40 billion valuation. Whether Grab can sustain that lofty valuation after listing, given the competitive landscape, is a bigger question.”
Nirgunan Tiruchelvam, head of consumer sector equity research at Tellimer in Singapore, said Altimeter’s share price drop suggested the market is uncomfortable with the valuation pledged for Grab, as well as indicative of weakness in the broader SPAC market.
Blank-check companies completed $181 billion of U.S. listings over the last five quarters, accounting for 55% of all IPO fundraising in New York, according to data compiled by Bloomberg.