Pomerantz Appointed Co-Lead Counsel in Grab Holdings Securities Litigation
On June 7, 2022, U.S. District Judge Victor Marrero of the Southern District of New York appointed Pomerantz LLP as Co-Lead Counsel on behalf of Si Fan and Amit Batra – Co-Lead Plaintiffs in the case – and the class, in In re Grab Holdings Limited Securities Litigation, 22-cv-2189 (S.D.N.Y.). This securities action alleges that Grab Holdings Limited ("Grab" or the "Company") misrepresented its financial performance and prospects.
Grab is a Southeast Asia-based technology company that provides access to transportation, food delivery and financial services via a mobile application. On December 1, 2021, Grab became a public entity via a business combination with Altimeter Growth Corp., a special purpose acquisition company.
Allegations against Grab include that: (i) the Company had overstated its post-business combination business and financial prospects; (ii) notwithstanding the ongoing COVID-19 pandemic, Grab’s financial projections failed to take into account the pandemic’s broad consequences, which included increased driver supply demand; (ii) the Company’s driver supply declined during the third quarter; (iv) as a result, Grab continued to invest heavily in driver and consumer incentives to “preemptively recalibrate driver supply”; and (v) as a result, the Company’s financial results would be adversely impacted, including, among other things, a significant decline in revenue.
On March 3, 2022, Grab announced its Q4 2021 financial results in which it disclosed that its fourth quarter revenues had declined 44% from the previous quarter and reported a $1.1 billion loss for the quarter. Grab’s Chief Financial Officer attributed the poor financial results to “invest[ing] heavily” in driver incentives and stated that it would take one or two quarters “to get that equilibrium between drivers and riders, between supply and demand.”
On this news, Grab’s share price fell $1.95 per share, or 37.3%, to close at $3.28 per share on March 3, 2022.