When a legendary value investor who cut his teeth in distressed debt builds a brand‑new position in a Southeast Asian super‑app, the move demands attention.
Howard Marks, the co‑founder of Oaktree Capital Management and author of those widely circulated “memos,” has made a career of pouncing on misunderstood assets that offer outsized upside relative to risk.
In the first quarter of 2025, Marks scooped up more than 10 million Class A shares of Grab Holdings (NASDAQ: GRAB). Most headlines framed the trade as an ordinary portfolio tweak, yet the filings hint at a carefully calculated decision that many investors have yet to unpack.
Marks often reminds readers that “you can’t predict, but you can prepare.” By lining up Grab’s strengthening balance sheet, fast‑improving economics and hidden fintech option value against a stock price still anchored to 2022 pessimism, he appears to be doing exactly that.
What the 13F Filing Revealed
Oaktree’s March‑31‑2025 13F shows a brand‑new 10.28 million‑share Grab position worth roughly $46‑$48 million, making the company the fund’s 19th‑largest equity holding at 1.2 % of reported assets.
The average purchase price of about $4.67 implies Marks began buying after Grab’s post‑SPAC slump had already erased more than two‑thirds of its market value.
That sizing is small by Oaktree standards, Marks is clearly probing rather than swinging for the fences, but the timing is notable. Grab’s share price had flattened near its cash per share, a signal Marks has historically treated as a free call option on the operating business.
A Balance Sheet Stronger Than Headlines Suggest
The single datapoint most investors overlook is Grab’s war‑chest. As of March 31 it held $6.2 billion in gross cash and $5.9 billion in net cash, more than one‑third of its $18 billion market capitalization.
That liquidity buys time to execute a profitability plan without resorting to dilutive equity raises. It also means enterprise value, the figure that ultimately determines return potential, sits closer to $12 billion.
Strip out that cash and Grab trades at roughly 2.0 times 2025 sales versus the 3.5‑plus multiples investors still accord Uber’s international segments or Indonesia‑focused GoTo. The market is effectively paying growth‑stock prices for peers but a special‑situation discount for Grab, the sort of asymmetry Marks habitually gravitates toward.
Another under‑reported line item: share‑based compensation fell to $80 million in Q1, down 15 % year over year, and management flagged more moderation ahead. Lower SBC directly improves per‑share economics, a nuance the headline EPS figures rarely capture.
Profitability Is Arriving Sooner Than Wall Street Modeled
Grab already crossed the profitability Rubicon. Q1 2025 produced its first IFRS net profit, a $10 million surplus versus a $115 million loss a year earlier, while adjusted EBITDA hit a record $106 million, the 13th consecutive quarter of expansion.
Management immediately raised full‑year adjusted EBITDA guidance to $460‑$480 million, implying margins nearly triple 2024 levels.
Two levers power that acceleration. First, delivery advertising, think sponsored restaurant listings and in‑app banners, now earns 1.7 % of deliveries GMV, up from 1.3 % a year ago, a high‑margin revenue stream many models still treat as negligible.
Second, AI‑driven dispatch and cloud‑cost optimization are lowering unit economics faster than riders or diners notice, an efficiency flywheel CEO Anthony Tan says is “early innings.”
Grab’s Under‑Appreciated Jewel Is Fintech
While ride‑hailing and food delivery dominate the narrative, the fintech arm may ultimately justify Marks’ thesis. Deposits at GXS Bank, Grab’s digital banking joint venture with Singtel, surged 199 % year over year to $1.432 billion, even before business‑banking products roll out across Southeast Asia in 2025.
Rising deposits not only provide a cheap funding base for micro‑loans and “buy now, pay later” products but also open a regulatory moat in the form of digital‑bank licenses in Singapore and Malaysia are capped, and Grab already owns two of them.
Crucially, fintech revenues grew 36 % last quarter yet still account for less than 10 % of group sales, leaving ample runway.
Oaktree has a long track record of spotting embedded options inside apparently mature businesses, think its early bets on convertible debt in distressed airlines. The scaling bank inside Grab looks eerily similar.
Why the Risk/Reward Fits Howard Marks’ Playbook
Marks’ memos stress buying when “risk is low and worry is high.” Grab checks both boxes. Losses have flipped to profits, operating cash burn has vanished, and the balance‑sheet fortress limits downside. Yet the stock still trades below the level of December 2022, when concerns about rising fuel costs and competitive subsidies were peaking.
Even applying a conservative 15 x multiple to 2026 consensus EBITDA of roughly $800 million (management’s trajectory suggests this is achievable), equity value approaches $12 billion after cash, or about $6.50 per share, 40 % above today’s quote.
A more generous 20 x multiple, in line with profitable fintech peers, pushes fair value north of $8. That’s the asymmetric payoff Marks seeks because heads he earns mid‑teens IRRs if Grab merely executes its published plan while tails his downside is cushioned by cash on hand.
Key Metrics to Track After Marks’ Purchase
Investors following Marks into the trade should watch three numbers more closely than the headline EPS print.
First, regional corporate costs, which fell 5 % year over year last quarter; sustained declines signal AI savings are real, not talk.
Second, the ratio of advertising revenue to deliveries GMV; each tenth of a point adds roughly $30 million of high‑margin sales.
Third, net cash, which management insists will remain “north of $5 billion” even as share buybacks restart later this year, a potential catalyst the Street may be underpricing.
Why Did Howard Marks Buy Grab Stock?
Howard Marks appears to have bought Grab stock because it’s a misunderstood, cash‑generating asset trading at a bargain price.
Grab looks like a calculated extension of that discipline into a company the market still pigeonholes as an unprofitable ride‑hailing app. Peel back the layers and you find a cash‑rich balance sheet, an operating turnaround already underway, and a digital bank that could, in time, rival the core business in profitability.
Put differently, Marks is buying a free call option on Southeast Asia’s emerging‑market consumer, funded largely by the company’s own cash.
Investors who ignore the trade because Grab sits outside the traditional value box may be overlooking the very mis-pricing Marks believes will drive his returns over the next few years. When a billionaire famed for mastering the risk curve decides the odds have tilted in his favor, it is usually worth asking what he sees that others do not.
The author has no position in any of the stocks mentioned. Financhill has a disclosure policy. This post may contain affiliate links or links from our sponsors.