Grab (GRAB) is often called the “Uber of Southeast Asia.” Earlier this month, GRAB stock took one of its sharpest hits in years after the company announced its acquisition of Atome Financial. While investors were still trying to understand the selloff, however, two of the company’s top executives stepped in and bought shares of Grab with their own money.
The timing is what makes this development interesting. Let's take a closer look.
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Why Grab Wants Atome in the First Place
Both Grab and Uber (UBER) started with the same basic playbook of ride-hailing before expanding into other areas. Now, Grab combines mobility, food and grocery delivery, payments, and financial services in Southeast Asia, serving more than 900 cities across eight countries. Notably, financial services are becoming increasingly important to Grab’s investment case. Grab already offers payments, digital banking, lending, and insurance alongside its core mobility and delivery businesses. That is where the Atome deal comes in.
On Sept. 15, Grab announced an up to $4.5 billion deal to acquire Atome Financial. Atome operates across Singapore, Malaysia, the Philippines, Indonesia, and Thailand, offering buy now, pay later (BNPL) products, consumer loans, BNPL cards, and other digital-lending services.
Investors should note that Grab is not paying $4.5 billion upfront. Instead, it has agreed to acquire an initial controlling 60% interest in Atome for $1.49 billion in cash and will acquire the remaining 40% roughly two years after the transaction closes. However, the second part of the deal will use a performance-based valuation formula that could result in an equity valuation with a $2 billion floor and $4.5 billion ceiling.
The market did not react to this acquisition positively. Shares of Grab have already been under pressure, with GRAB stock down 37% year-to-date (YTD). After the Atome announcement, the stock hit $2.74 per share. That is the stock's lowest level since May 2023, according to Reuters.
www.barchart.com Why Are Investors Not Convinced With the Deal?
This acquisition comes at a time when Grab is already rapidly expanding its financial services business. Grab expects the deal to provide it with access to Atome's established consumer-lending platform and merchant network, while also enabling Atome to connect to Grab's larger ecosystem. According to the company, Atome has “25 million cumulative transacted users” and relationships with more than 30,000 brands.
Grab expects its financial services segment, including Atome, to reach $500 million in adjusted EBITDA by 2028 and build a gross loan portfolio of more than $6 billion. Grab even raised its 2028 target for company-wide adjusted EBITDA to $1.7 billion and expects revenue to grow at more than 30% annually between 2025 and 2028. The company is confidently betting that greater scale in lending could translate into much higher profitability over the next two years. However, the market perhaps couldn’t digest this ambitious target, which is dependent on how quickly the combined lending business scales while maintaining credit quality and controlling costs. For now, analysts expect earnings to increase by 117% in fiscal 2026 before plateauing in fiscal 2027.
Insider Buying Boosted GRAB Stock
According to Reuters and the company’s filing, CEO Anthony Tan bought 10.35 million Class A shares for about $29.9 million on Sept. 21, while President and Chief Operating Officer Alex Hungate also bought 299,571 shares for roughly $867,000. Put together, the two executives bought just under $31 million worth of Grab shares. The purchases came shortly after the Atome announcement had failed to reassure the market and GRAB stock hit its multi-year lows.
GRAB stock subsequently rebounded, closing almost 9% higher on Sept. 22. Tan later discussed the purchases at a company town hall, stating that he had invested his own cash to back up his confidence in Grab’s strategy and direction. While the insider purchases were notable, Grab still has to prove that Atome can help turn its expanding financial-services operation into a much larger and more profitable business while maintaining credit quality.
On Wall Street, GRAB stock holds a consensus “Strong Buy” rating overall. Of the 16 analysts covering the stock, 13 have a “Strong Buy” rating, two have a “Moderate Buy,” and one analyst has a “Hold” rating. The average price target for GRAB stock is $5.85, which implies potential upside of 87% from current levels. The high price estimate of $8 suggests potential upside of 156% from here.
www.barchart.com On the date of publication, Sushree Mohanty did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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