As Grab shareholder lock-ups expire, is fresh round of selling imminent?

Major investors in Grab must decide whether to sell their shares as a lockup agreement that prevented them from doing so without prior approval from Grab’s board expires today, May 30.

As the lockup agreement ends, principal shareholders SVF Investments (Softbank Vision Fund), Uber, Didi, and Toyota will be allowed to sell their shares in the Southeast Asian super app. On the other hand, key Grab executives had agreed in March to extend the lockup of their shares until May 30, 2023.

Grab co-founders ring the opening bell in Singapore when Grab went public on the Nasdaq / Photo credit: Grab

These four investors collectively hold around 1.7 billion shares – or around 45% of issued and outstanding shares – in the Southeast Asia super app. If they decide to sell, the increased market supply could further dampen the firm’s share price, which has already seen a significant decline in recent months. 

However, the dip in Grab’s share price could discourage investors from selling. So far, SVF Investments, Uber, Didi, and Toyota have not hinted at selling their stakes in the firm. Tech in Asia reached out to the concerned parties but had not heard back from them at the time of publishing. 

“We have regular conversations with all of our large investors, many of whom we have long-term, deep strategic partnerships and projects with, that extend beyond their investment in us,” says a Grab spokesperson. “That’s a basis for how they think about their continued shareholding in our stock.”

See also: Grab’s financial health in 9 charts

Shareholder decisions could hinge on several factors, including the nature of their investment in Grab and whether they have an immediate need to raise cash or stem investment losses as tech stocks have plummeted in recent months.

What calculations are these shareholders making? 

Softbank’s Vision Fund eyeing cash for buybacks?

One company that may be looking to raise cash is Softbank Group, which reported a loss of 1.7 trillion yen (US$13 billion) in the last financial year. 

Its VC arm, Softbank Vision Fund, holds nearly 700 million shares in Grab – or 18.3% of its total outstanding shares – making it the super app’s largest shareholder. The tech-focused investment firm reported its largest-ever loss of 3.5 trillion yen (US$27.6 billion) for the financial year ending (FYE) March 31, 2022, as share prices of the fast-growing tech companies it invests in have slumped. 

Softbank Vision Fund’s recent heavy losses have led to projections that its parent company would spend more on share buybacks than on investments. 

Could the Vision Fund consider divesting its stake in Grab to boost its cash holdings? In the past year, the Japanese investment firm has also sold shares in several tech companies, including ride-hailing platform Uber, South Korean ecommerce company Coupang, and food delivery firm DoorDash.

Will Uber wait for a better time to sell?

Are Didi’s shrinking global ambitions a cue to sell?

Toyota’s strategic reasons to hold