Grab shares fell 10.8% this week as drivers in Vietnam protested pay cuts and news surfaced of a possible $2 billion acquisition. Broader macro pressure on growth stocks added to the decline.
Grab (GRAB) stock lost ground this week, falling 10.8% across the stretch even as the ride-hailing and delivery company traded up 1.33% on the day, at $3.05 a share. The drop came alongside a broader pullback in growth stocks, and it also followed company-specific news out of Vietnam and reports of a potential acquisition.
Vietnamese driver protests weigh on the stock
Drivers in Vietnam protested against Grab this week over pay concerns, highlighting rising service charges and diminished take-home pay. The dispute raised the possibility that the Vietnamese government, and governments in other countries, could become more involved in the matter.
The S&P 500's level fell 2% over the same stretch, and the Nasdaq Composite's level declined 1.8%, as rising bond yields, oil prices, and inflation pressured growth stocks broadly. Grab saw valuation pullbacks in conjunction with that trend, on top of the pressure from the Vietnam news.
A possible BNPL acquisition fails to lift sentiment
Bloomberg reported this week that Grab is in discussions to purchase a controlling stake in Atome Financial, a buy now, pay later specialist based in Singapore. The deal would reportedly value Atome at more than $2 billion.
Atome's buy now, pay later services would seem to integrate well with Grab's existing offerings, but news of the potential acquisition didn't support Grab's share price. The economics of buy now, pay later operations remain untested over the long term, and investors may worry that Grab would overpay in a potential deal.
Grab's market cap stood at $12 billion, with the stock trading in a day's range of $2.96 to $3.06 and a 52-week range of $2.96 to $6.62. Volume ran to 63.2 million shares, above its average volume of 47.3 million.
Source: Motley Fool
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