Why a Gojek-Grab merger is like the Loch Ness monster

Opening Bell 🔔 is Tech in Asia’s free newsletter that brings you the biggest news and latest trends around Asia’s publicly listed tech companies. [Read from your browser]( Opening Bell 🔔 Welcome to the Opening Bell! Delivered every Monday via email and through the Tech in Asia website, this free newsletter breaks down the biggest stories and latest trends on Asia’s publicly listed tech companies. If you’re not a subscriber, get access by [registering here](.  ---------------------------------------------------------------  Written by Simon Huang  Journalist  Hello {NAME} I recently spoke to a colleague who was involved with bringing our merger with SPH Media over the finish line. One thing I learned is that signing an agreement is just the beginning of a long process. Getting from that point to finalizing the deal comes with its share of challenges, to say nothing of post-completion matters and the actual integration of two different companies. However, this is small peas compared to what a merger between rivals Grab and GoTo would involve. Recently, reports of a potential deal between the two super apps have surfaced yet again. In this week’s featured story, my colleague Jofie and I take a closer look at why this is happening. Hint: It may have something to do with GoTo’s new leadership and the consummation of the deal between Tokopedia and TikTok Shop. While the media loves to speculate about M&A (Tech in Asia is guilty of that too), any merger between Grab and Gojek is unlikely to happen in the next couple of years. GoTo is more financially secure than it was in early 2023, when rumors of a union last emerged. A merger is also likely to face plenty of regulatory hurdles, both in Singapore and Indonesia. All this deal talk between Grab and GoTo reminds me of Nessie or the Loch Ness monster, a mythical marine creature thought to inhabit a lake in Scotland. Every now and then, someone will claim to have seen it, but it is still widely regarded as a myth - for now, at least. -- Simon  ---------------------------------------------------------------  THE BIG STORY [Gojek plus Grab: The merger that neither needs and regulators don’t want]( A potential merger can help improve both companies’ cash position. However, regulatory challenges may hinder the plan. ---------------------------------------------------------------  3 TRENDS TO KEEP EYE ON Hot stocks, earnings reports, restructuring, pressure from activist investors, and more. 1️⃣ Wish no more: ContextLogic (WISH, NDAQ), the parent company of online shopping platform Wish, [has sold]( its assets and liabilities to Singapore-based Qoo10 for US$173 million. While this marks a steep decline from its US$14.1 billion valuation when it went public in 2020, the price was still a premium of 44% to its closing price before the sale was announced. Wish was a pioneer in connecting merchants in China directly to consumers in developed markets like the US, shipping products that were smaller and cheaper to transport. However, the platform’s user numbers have fallen significantly, and it was unable to compete effectively against the likes of Temu and Shein, which have captivated users looking for a bargain. Wish’s downfall shows that sometimes, it doesn’t pay to be first. 2️⃣ Uber shoveling cash back to investors: Here’s something that might have seemed unlikely a few years ago. Ride-hailing pioneer Uber (UBER, NYSE) is [buying back]( up to US$7 billion worth of shares for the first time ever. Share buybacks are an increasingly popular way for tech companies to reward shareholders. They provide liquidity for those who want to sell while remaining shareholders can get a proportionally bigger stake in the company via the reduced the share count. Uber joins other tech firms like [Meta (META, NDAQ)]( and [Airbnb (ABNB, NDAQ)]( in funneling excess cash to shareholders. For now, Southeast Asian tech platforms like Sea and Grab are unlikely to follow in their American peers’ footsteps. But they will surely be observing how the market responds to these announcements. 3️⃣ Sony to list financial business: Apart from announcing an estimate-beating 10% increase in operating profit for its third quarter, Japanese tech and entertainment giant Sony (6758, TYO) [said]( it plans to list its financial business in October 2025. The company will retain a stake of just under 20% in Sony Financial Group while focusing on expanding in the entertainment and image sensor sectors. This comes as listed Japanese companies are being pressured to create more value for shareholders by implementing corporate governance reforms, unwinding cross shareholdings, and boosting dividends and buybacks. The moves seem to be working: Japan’s Nikkei index has [rallied]( to its highest level in 34 years, just 2% shy of the all-time high in 1989.  2 EYE-POPPING NUMBERS Tech in Asia scours the internet to bring you head-turning numbers from the world of business. - [4,000]( The number of jobs that network equipment maker Cisco (CSCO, NDAQ) is cutting, amounting to 5% of its global workforce - [US$10 billion]( The valuation that insurer FWD Group is seeking as part of a stake sale, following the delay of a planned IPO THE ONE YOU DIDN'T SEE COMING We spotlight the story that had everyone talking and social media buzzing during the past week. Lyft needs to mind its zeros: Typos happen all the time. But you can be sure that employees of Lyft (LYFT, NDAQ) will be extra vigilant in the future after a press release [erroneously stated]( that the ride-hailing platform’s profit margins were set to expand by 500 basis points in 2024. This sent the US-based firm’s shares surging by 62% in after-hours trading. It turns out that Lyft was expecting margins to expand by a still-commendable 50 basis points. Wedbush Securities analyst Dan Ives termed this a “debacle of epic proportions,” saying that he had “never seen an error like this in my almost 25 years on the Street.” Indeed, this mistake overshadowed what was a good set of results for the company’s long-suffering shareholders. It also says a lot about what moves the market today, as many trades are done with algorithms processing data - without human oversight. A human would probably have realized how unlikely the 500 basis point figure was. Yet Lyft might get the last laugh: Its shares were still up by 58% since it announced its results. No, that isn’t a typo.  That’s it for this edition - we hope you liked it! Not your cup of tea? You can unsubscribe from this newsletter by going to our preference center at the bottom of this email. Happy investing and see you next week! Disclaimer: This content is for informational purposes only. Kindly do not construe any such information as legal, tax, investment, financial, or other advice. [ADVERTISE]( | [SUBSCRIBE]( | [HIRE]( | [FIND JOBS]( P.S. Don't miss out on the biggest tech news and analysis. Add newsletter@techinasia.com to your address book, contacts, or safe sender list. Or simply move us into your inbox. Too many emails? Switch to a different frequency or get new content through our [preference center]( or [unsubscribe](. You can also break our hearts and remove yourself from all Tech in Asia emails over [here](  Copyright © 2024 Tech in Asia, All rights reserved. 63 Robinson Road, Singapore 068894