Investors Involved in Biggest SPAC Merger File Class Action Securities Lawsuit
Shepherd Smith Edwards and Kantas (SSEK Law Firm at investorlawyers.com) is looking into claims of losses by investors of Grab Holdings, Ltd. (NASDAQ: GRAB). This firm became a public entity on December 1, 2021, via the largest Special Purpose Acquisition Company (SPAC) merger to date with Altimeter Growth Corp. The latter is a blank-check firm run by Altimeter Capital CEO and founder Brad Gerstner.
Grab Holdings, the largest ride-hailing, and delivery company in Southeast Asia has experienced the opposite of growth. Its shares plunged over 20% from $13.06/share to $8.75 at the end of the first day of trading. On March 3, 2022, Grab announced that fourth-quarter revenues saw a 44% drop from the third quarter. That’s a $1.1B loss.
According to Bloomberg, in November 2021, the company reported a widening net loss of $988M for the third quarter, with revenue declining 9% to $157M. The damper that COVID-19 placed on business for Grab, including Singapore’s ban of several African countries in December 2021 because of the omicron variant, didn’t help.
If you are a Grab Holdings investor and would like to explore your legal options, contact our savvy SPAC investment attorneys at SSEK Law Firm today. You may have grounds for a securities case against your financial advisor who marketed and sold Grab shares to you.
Misrepresentations and Omissions Alleged by Grab Holdings Investors
The class action securities lawsuit brought on behalf of Grab investors is for those that bought or acquired shares in this company between 11/12/2021 and 3/3/2022. The plaintiffs contend that Grab Holdings didn’t disclose to investors that:
- Its driver supply had dropped during the third quarter of last year.
- The company invested a lot in driver and consumer incentives to try to “recalibrate” said supply.
- Grab Holdings’ financial outcomes were impacted because of this.
- The company’s “positive statements” regarding business, operations, and prospects were misleading or lacked sufficient grounds.
Through the Grab Superapp, the company sells digital services, including transportation, hotel bookings, food delivery, insurance services, online banking, and mobile payments. Its early investors included Toyota, Hyundai Motors, SoftBank, and others.
What is a SPAC?
Special Purpose Acquisition Companies are “blank-check” companies set up to raise capital through public markets. The funds are then used to merge with a private company with plans to quickly take the latter public (compared to the time it would take for a traditional IPO).
SPAC investors do not know beforehand which company will be acquired. Although often run by financial professionals and experts, there are risks involved in investing in a SPAC, such as:
- Its structure can make it easy for SPAC sponsors, who own a 20% stake, to engage in fraud or other misconduct, such as self-dealing.
- If too many initial investors are trying to redeem their shares, a capital shortfall can happen.
- Since no underwriter is required, no one can ensure that regulatory requirements, which protect investors, are being fulfilled.
- Profits could end up being low.
- A SPAC may liquidate.
Seasoned FINRA Arbitration Lawyers
If you want to maximize your financial recovery from losses you’ve sustained in Grab Holdings, joining a class action securities fraud lawsuit won’t help you as much as filing your own investor claim in FINRA arbitration. Our knowledgeable FINRA arbitration attorneys can help you determine whether you have grounds for a case. Call SSEK Law Firm at (800) 259-9010 today or contact us online.