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Business

GM’s U.S. Sales Recovered From Early 2022 Woes to Post Full-Year Rise

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The U.S.’s largest auto makers confronted another challenging year in 2022 with supply-chain snarls and poorly stocked dealership lots denting sales results and concerns mounting about an economic downturn.

The Detroit auto maker also retook its U.S. sales crown from

Toyota Motor Corp.

TM -0.65%

, outselling its Japanese rival by about 165,630 vehicles last year.

Toyota had overtaken GM in 2021 as the U.S.’s top-selling auto maker, an upending of the traditional pecking order that was largely due to parts shortages that both car companies viewed as temporary.

Toyota said its U.S. sales were down 9.6% in 2022, and

Hyundai Motor Corp.

closed last year with a 2% decline.

Most other car companies report throughout the day Wednesday.

Ford

plans to report 2022 sales results Thursday.

Industrywide, U.S. auto sales are projected to total 13.7 million vehicles in 2022, the lowest figure in more than a decade and an 8% decrease from the prior year, according to a joint forecast by J.D. Power and LMC Automotive. Sales are expected to remain well below prepandemic levels of roughly 17 million.

WSJ toured Rivian’s and Ford’s electric-vehicle factories to see how they are pushing to meet demand. Illustration: Adam Falk/The Wall Street Journal

The drop-off marks a reversal for a sector that started the year hoping historically low interest rates and an end to parts shortages would fuel a rebound in sales. Instead, vehicles continued to be in short supply as car makers mostly waited for scarce computer chips. Russia’s invasion of Ukraine, a key supplier of auto parts, added to the supply-chain troubles.

A prolonged shortage of semiconductors created pent-up demand for new vehicles, which meant that cars and trucks went to waiting buyers almost as soon as they hit the dealer lot. The lack of availability left buyers paying top dollar for the rides they could secure, pushing the average price paid for a vehicle in December to a near record high of $46,382, according to J.D. Power.

The record high prices buoyed auto maker profits last year despite shrinking sales volume and insulated the industry from a broader decline in consumer spending. 

Now, while some supply constraints are easing, auto executives are confronting other obstacles, such as rising interest rates and soaring materials costs. Inventory levels are bouncing back, putting pressure on car companies to resist the kinds of profit-damaging discounts that have been historically used to counter slowing demand.  

Photos: The EV Rivals Aiming for Tesla’s Crown in China

Some analysts caution that it is still too early to tell if rising prices are pushing buyers away. Heavy snowfall in large parts of the northern U.S. weighed on December sales, making it hard to see the impact of higher prices, JPMorgan analysts wrote in a note to clients. 

Still, there are early signs that demand might be slowing, even for the hottest car makers.

Tesla Inc.

reported Monday that it fell short of its growth projections last year, in part because of Covid-related shutdowns at its Shanghai factory and changes in the way it manufactures and distributes vehicles.

Analysts have pointed to decreased wait times for Tesla vehicles as a sign of softening demand. Tesla offered a rare discount on some of its vehicles if buyers agreed to take delivery before the end of 2022.

Electric-vehicle sales accounted for 3% of the U.S. retail market in 2021 and nearly 6% in 2022, according to J.D. Power.

Executives have been investing billions of dollars on new models and factories, in the belief that sales will continue to expand rapidly over the next decade.

But rising prices for raw materials used in lithium-ion batteries pushed up EV prices throughout 2022, and some executives warned of a looming battery shortage. 

General Motors cut its EV sales target for 2023 because of a slower-than-expected increase of battery production.

The semiconductor shortage, while easing for some other sectors, such as smartphones and personal computers, remains a challenge for autos, in part because car companies typically use inexpensive, commodity silicon for vehicles. Toyota, citing a lack of chips, cut its production outlook for the current fiscal year through March.

Falling used-car values are also discouraging to potential buyers, who have trade-ins and are looking to use them to offset the higher cost of a new vehicle. 

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What is your outlook on the auto industry for 2023? Join the conversation below.

That bodes poorly for sales this year, as retailers worry that buyers who were unable to buy a car as a result of shortages will now be priced out of the market, according to a survey of dealers conducted by Cox Automotive.

The research site Edmunds expects new-car sales to hit 14.8 million in 2023, a marginal increase from last year but well below prepandemic levels. A combination of rising rates, inflation and economic turmoil could push vehicles out of reach for many buyers, Edmunds said.

Write to Sean McLain at sean.mclain@wsj.com

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Business

Tesla, GM Among Car Makers Facing Senate Inquiry Into Possible Links to Uyghur Forced Labor

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WASHINGTON—The Senate Finance Committee has opened an inquiry into whether auto makers including

Tesla Inc.

and

General Motors Co.

are using parts and materials made with forced labor in China’s Xinjiang region.

In a letter sent Thursday, the committee asked the chief executives of eight car manufacturers to provide detailed information on their supply chains to help determine any links to Xinjiang, where the U.S. government has alleged the use of forced labor involving the Uyghur ethnic minority and others.

The U.S. bans most imports from the region under the Uyghur Forced Labor Prevention Act. The letter to car companies cited a recent report from the U.K.’s Sheffield Hallam University that found evidence that global auto makers were using metals, batteries, wiring and wheels made in Xinjiang, or sourcing from companies that used Uyghur workers elsewhere in China.

According to that report, some car manufacturers “are unwittingly sourcing metals from the Uyghur region.” It said some of the greatest exposure comes from steel and aluminum parts as metals producers shift work to Xinjiang to take advantage of Chinese government subsidies and other incentives.

The U.S. ban on products linked to Xinjiang has already caused disruptions in the import of solar panels made there.

China has called Washington’s claim baseless. It disputes claims by human-rights groups that it mistreats Uyghurs by confining them in internment camps, with Beijing saying its efforts are aimed at fighting terrorism and providing vocational education.

Besides

Tesla

and GM, the letter signed by Finance Committee Chairman

Ron Wyden

(D., Ore.), was sent to

Ford Motor Co.

,

Mercedes-Benz Group AG

,

Honda Motor Co.

,

Toyota Motor Corp.

,

Volkswagen AG

and

Stellantis

NV, whose brands include Chrysler and Jeep.

GM said its policy prohibits any form of forced or involuntary labor, abusive treatment of employees or corrupt business practices in its supply chain.

“We actively monitor our global supply chain and conduct extensive due diligence, particularly where we identify or are made aware of potential violations of the law, our agreements, or our policies,“ the company said.

A Volkswagen spokesman said the company investigates any alleged violation of its policy, saying “serious violations such as forced labor could result in termination of the contract with the supplier.” A Stellantis spokesperson said the company is reviewing the letter and the claims made in the Sheffield Hallam study.

Other companies didn’t immediately provide comments.

“I recognize automobiles contain numerous parts sourced across the world and are subject to complex supply chains. However, this recognition cannot cause the United States to compromise its fundamental commitment to upholding human rights and U.S. law,” Mr. Wyden wrote.

The information requested includes supply-chain mapping and analysis of raw materials, mining, processing and parts manufacturing to determine links to Xinjiang, including manufacturing conducted in third countries such as Mexico and Canada. 

General Motors says its policy prohibits forced or involuntary labor, abusive treatment of employees or corrupt business practices in its supply chain.



Photo:

mandel ngan/Agence France-Presse/Getty Images

The lawmakers are also asking the auto makers if they had ever terminated, or threatened to terminate, relations with suppliers over possible links to Xinjiang, and if so, provide details of the cases.

The committee’s action comes as the Biden administration and bipartisan lawmakers increase their focus on alleged forced-labor practices in China as a key component of their confrontation with Beijing over its economic policy. The United Auto Workers has called on the auto industry to “shift its entire supply chain out of the region.” 

The State Department has said more than one million Uyghurs and other minorities are held in as many as 1,200 state-run internment camps in Xinjiang. Chinese authorities “use threats of physical violence” and other methods to force detainees to work in adjacent or off-site factories, according to the department.

The U.S. Customs and Border Protection investigated 2,398 entries with a total value of $466 million during the fiscal year ended September, up from 1,469 entries in the previous year and 314 cases in fiscal 2000.

Analysts expect the CBP’s enforcement activity to further increase this year, with a strong bipartisan push for a tougher stance on the forced-labor issue.  

The researchers at Sheffield Hallam University found that more than 96 mining, processing, or manufacturing companies relevant to the auto sector are operating in Xinjiang. The researchers used publicly available sources, including corporate annual reports, websites, government directives, state media and customs records.

Write to Yuka Hayashi at Yuka.Hayashi@wsj.com

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Business

Toyota Overtakes GM as Bestselling Auto Maker in U.S.

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The Japanese auto maker, which for decades has worked to expand its presence in the U.S., outsold GM by roughly 114,000 vehicles in 2021. Toyota’s total U.S. sales of 2.3 million rose about 10% compared with 2020, the company said Tuesday.

By contrast, GM reported a nearly 13% slide in results for a total of 2.2 million vehicles sold in 2021, as the semiconductor shortage took a bigger toll on the company’s manufacturing operations and left dealers with fewer vehicles to sell. GM had been the No. 1 auto seller in the U.S. since 1931, according to trade publication Automotive News.

Toyota has largely benefited from its decision to stockpile computer chips, which are used in a wide array of vehicle electronics. It bet earlier than most other auto makers on a recovering U.S. car market and cut parts and production orders less sharply than rivals, making it better prepared for an eventual surge in consumer demand.

While Toyota executives say they were successful in navigating some of last year’s supply-chain constraints, they don’t view the lead over GM as a permanent shift in the industry’s closely watched sales rankings.

“To be clear, this is not our goal, nor do we see it as sustainable,” said

Jack Hollis,

Toyota’s senior vice president of operations in North America. He added that the company doesn’t expect to use its dethroning of GM last year in its advertising.

A GM spokesman declined to comment on the company’s sales ranking. He said GM has given priority to its bestselling products—large pickup trucks and sport-utility vehicles—and expects sales growth this year as the chip shortage abates.

Other foreign auto makers and electric-car maker

Tesla Inc.

TSLA -4.17%

also surged ahead in U.S. sales in 2021, siphoning market share from Detroit, according to company reports and analyst forecasts.

Hyundai Motor Co.

of South Korea, for the second year in a row, notched sizable share gains, selling 738,081 vehicles in 2021 and boosting sales by about 19% over the prior year, the company said Tuesday.

Mazda Motor Corp.

,

Volkswagen AG

and

BMW AG

also posted stronger-than-average sales, research firm Cox Automotive estimates.

Need more horsepower? Want automated driving? Auto makers such as Dodge, Polestar and Jeep are exploring over-the-air updates like these as a way to generate new revenue streams and retain brand loyalty. WSJ’s George Downs explores whether car manufacturers excel at software development. Photo illustration: George Downs

Overall, auto makers sold just shy of 15 million vehicles in the U.S. last year, according to a forecast from research firm J.D. Power. That total would be up slightly from 2020, when the onset of the Covid-19 pandemic hurt car sales for part of that year. But it is a sharp drop from the mark of 17 million vehicles that the industry had eclipsed for five straight years before that.

Auto stocks rallied Tuesday after the latest sales results and news that

Ford Motor Co.

plans to double production of its new all-electric truck, after a rise in reservations.

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Did you buy a new car in 2021, or do you plan to buy one in 2022? Why, or why not? Join the conversation below.

Shares in

Ford

were up nearly 11% on Tuesday afternoon. GM’s stock was up 6%, while Toyota’s American depositary receipts were trading at a record high of $195.42.

U.S. vehicle sales set a blistering pace last spring as American car shoppers surfaced, looking to spend their savings from the pandemic lockdown on new wheels. But by summer, the chip shortage that had been hobbling factory schedules world-wide resulted in nearly bare dealership lots, curbing sales in the second half of 2021.

Forecasters expect another muted year of vehicle sales, even though the chip shortage is expected to gradually ease in coming months. Auto executives have said it could take the entire year to substantially replenish dealership inventories, which likely would curtail sales despite what dealers say is strong underlying demand.

Edmunds.com expects U.S. sales to reach 15.2 million vehicles in 2022, up slightly from the expected final numbers from last year. Analysts at RBC Capital are more bullish, pegging the total at roughly 15.8 million vehicles, with an expected surge later in the year as supply improves.

GM was among the hardest hit by the chip shortage and other supply-chain problems.



Photo:

Mario Tama/Getty Images

Toyota executives said they expected U.S. auto sales to grow to about 16.5 million vehicles this year, lifted by historically low interest rates, record stock-market performance and higher savings rates that would help support shoppers.

Lofty prices are expected to persist, as the seller’s market created by the inventory crunch continues, analysts said. The average price paid for a new vehicle hit a record $45,700 in December, 20% higher than a year earlier, J.D. Power estimates.

Record used-vehicle pricing is contributing to strong new-car prices, J.D. Power said, because buyers trading in their old vehicles have more money to work with. The average trade-in vehicle in December was worth about $10,200, up from about $4,600 a year earlier, the firm said.

“Pent-up consumer demand will keep inventory levels near historical lows,” likely leading to more record pricing this year, said

Thomas King,

president of data and analytics at J.D. Power.

The uneven disruption to production schedules jumbled the pecking order among auto makers in 2021. While the chip shortage and other supply-chain problems have affected all auto makers, GM and Ford were among the hardest hit, each having scrapped more than 600,000 planned vehicles in North America, according to research firm AutoForecast Solutions LLC.

Ford plans to report 2021 sales results on Wednesday.

On Tuesday, the Dearborn, Mich., auto maker said it planned to double its goal for manufacturing its new electric version of the F-150 pickup truck, targeting 150,000 a year. Ford said the increased production plans reflect high demand for the model, with about 200,000 reservations placed to buy one of the trucks.

Other sales winners included Asian and European brands, as well as Tesla, which said Sunday that global deliveries jumped 87% in 2021, to 936,000 vehicles. Tesla doesn’t break out sales figures regionally. Cox estimated that its U.S. market share rose to 2.2% last year—about even with

Mercedes-Benz

—from 1.4%.

Randy Parker,

head of national sales for Hyundai Motor America, said the auto maker took several steps to counter the market challenges, including leaning more on online sales operations and encouraging dealers to line up sales for vehicles that have yet to hit the lot.

He said he expects Hyundai to keep sharpening its efforts into 2022, aiming to build on its recent share gains.

“I don’t believe in coincidences,” Mr. Parker said. “I think that we adapted to the crisis extremely well.”

—Ben Foldy contributed to this article.

How the Global Chip Shortage Affects You

Write to Mike Colias at Mike.Colias@wsj.com and Christina Rogers at christina.rogers@wsj.com

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Business

Rivian Is Shooting for a $64 billion Valuation. Here’s Why That’s Not Crazy.

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Rivian’s assembly line in Normal, Ill.


Courtesy of Rivian

Text size

Electric-truck maker Rivian is set to go public this coming week at a market value that could exceed that of Honda Motor, despite having sold just a handful of vehicles. But that’s not as crazy as it sounds. Depending on where the stock opens, it might even be worth the price.

To many, a market cap around $64 billion makes no sense. The company has essentially no sales, and no manufacturing experience. What it does have is powerful backers—


Ford Motor

(ticker: F) and


Amazon.com

(AMZN)—and lots of expenses. The company burned through some $1.6 billion in the first half of 2021 preparing its vehicles and building its manufacturing plant in Normal, Ill. Honda, by comparison, sells roughly five million cars a year, with sales of about $130 billion.

That isn’t stopping Rivian from aiming high. The company is looking to sell 135 million shares at a price of $72 to $74 a share, according to its latest Securities and Exchange Commission filing, raising about $10 billion in the process. At $73 a share, Rivian stock would be worth about $64 billion based on 882 million shares outstanding after the deal is done.

Some think that valuation is ridiculous. It makes “no sense,” says David Trainer, CEO of investment research firm New Constructs. “Despite the popularity of the electric-vehicle market and huge gains in [


Tesla

(TSLA)], we think investors should avoid the temptation to buy Rivian shares.”

But a dive into the math suggests that the valuation isn’t quite as nuts as it looks. A lot of trucks and sport utility vehicles get sold in the U.S. Roughly half of all new-vehicle sales are SUVs and 20% are pickup trucks. In a normal, nonpandemic year, that’s roughly nine million SUVs and four million trucks.

Rivian’s first product, the R1T, is a


Toyota Motor

(TM) Tacoma-size pickup. Rivian’s second vehicle is an SUV dubbed R1S. At 200,000 units a year, enough to fill its current facility, Rivian would have about a 1.5% share of U.S. SUV and truck sales. Rivian also already has a buyer for its commercial electric vehicles: Amazon, which has ordered 100,000 of them.

“The big question now [is] who’s going to be No. 2 in EVs?” asks Gary Black, the managing partner of the Future Fund Active exchange-traded fund. “My bet would be Rivian, given the huge pickup and SUV total addressable market.”

More important is what Rivian’s long-term market share will be. If EVs capture 20% of the U.S. by 2025—in line with what traditional auto makers are aiming for—and Rivian does half as well as Tesla, it could sell 800,000 units a year, generating gross profits as high as $14 billion. A $51 billion valuation, net of cash, would leave Rivian trading at 3.6 times gross profit, slightly higher than Ford.

That’s a very optimistic production ramp and valuation. Still, it shows that investors shouldn’t dismiss the company just because it looks expensive. And with Rivian set to have about $13 billion of cash on hand after the offering, it will have the money it needs to make its dream come true.

Oh, and its truck is very nice, too.

Write to Al Root at allen.root@dowjones.com

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Technology

World’s Largest Chip Maker to Raise Prices, Threatening Costlier Electronics

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The world’s largest contract chip maker is raising prices by as much as 20%, according to people familiar with the matter, a move that could result in consumers paying more for electronics.

Taiwan Semiconductor Manufacturing Co. plans to increase the prices of its most advanced chips by roughly 10%, while less advanced chips used by customers like auto makers will cost about 20% more, these people said. The higher prices will generally take effect late this year or next year, the people said.

Apple Inc. is one of TSMC’s largest customers and its iPhones use advanced microprocessors made in TSMC foundries. It couldn’t be determined how much more Apple would pay.

A TSMC spokeswoman declined to comment on prices but said the company works closely with customers. An Apple spokeswoman didn’t immediately respond to a request for comment.

The price increases come in the wake of a global semiconductor shortage that has affected Apple and most car makers, including General Motors Co. and Toyota Motor Corp. In August, GM said it had to idle three factories in North America that make large pickup trucks, the company’s biggest moneymaker. Last week, Toyota said it would curb production by 40% in September.

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Business

Car Market Is Expected to Cool Amid Dearth of Vehicles on Lots

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The dwindling number of vehicles on dealership lots is threatening to cool the U.S. car market’s blistering sales pace.

Analysts are expecting new-car sales from June to fall off from recent months, when car shoppers turned out in near-record numbers, buoyed by excess household savings and pent-up demand from the pandemic. Most car makers are scheduled Thursday to report U.S. sales results for June.

Customers are still clamoring for a new ride, dealers say. But it has become harder for salespeople to match buyers to vehicles because of the lack of inventory caused by the computer-chip shortage that has hobbled car production since winter.

“We really don’t have enough cars to go around,” said Joe Shaker, owner of Shaker Automotive Group, which sells several brands in Connecticut and Massachusetts. He said his Ford store is carrying about 14% of its normal inventory.

New-vehicle sales in the first half of the year are expected to reach about 8.3 million units, according to an estimate from J.D. Power, a 32% increase over the same period a year earlier and up nearly 1% from the first half of 2019.

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Business

Fire at Giant Auto-Chip Plant Fuels Supply Concerns

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TOKYO—A fire at a factory of one of the world’s leading auto chip makers has added to the troubles of car makers that already have slashed production because of a semiconductor shortage.

The fire Friday left a swath of charred equipment in the factory owned by a subsidiary of Renesas Electronics Corp. in Hitachinaka, northeast of Tokyo. The company said it would take at least a month to restart the damaged operations.

Shares of Japan’s three leading car makers— Toyota Motor Corp. , Nissan Motor Co. and Honda Motor Co. —all fell by more than 3% on Monday, worse than the overall market, while Renesas shares were down 4.9%.

Renesas said heat from an electrical problem inside a single piece of equipment caused the fire and contaminated clean rooms needed to make semiconductors. It said two-thirds of the chips made at the fire-affected factory were automotive chips.

Renesas’s chief executive, Hidetoshi Shibata, said Sunday the impact on global chip supplies would be significant. Mariko Semetko, a credit analyst at Moody’s Japan, said the fire was likely to damp the recovery of global auto production this year, while auto makers said they were still assessing the impact.

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Business

Toyota, Honda Shut U.S. Factories as Perfect Storm Disrupts Supply Chains

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Toyota Motor Corp. , Honda Motor Corp. and Samsung Electronics Co. said supply-chain problems were complicating their businesses, as freak weather, port blockages and the continued impact of Covid-19 combine to disrupt global supply chains.

Toyota and Honda said Wednesday that they would halt production at plants in North America because of a squeeze in crucial supplies, including plastic components, petrochemicals and semiconductors. Honda also blamed port backlogs and severe winter weather that has frozen plants and pipes across the central U.S. for the disruption.

Separately, Samsung, the world’s largest maker of smartphones, said a severe global shortage in chips would hurt its business into the next quarter. The South Korean company also said it might withhold launching a new model of one of its most popular handsets, though it said the move was aimed at keeping it from competing with an existing handset.

The disruptions underscore how a number of forces are coming together to squeeze the world’s supply chains: from the pandemic-driven rise in consumer demand for tech goods to a backlog of imports at clogged California ports and U.S. factory outages caused by severe weather. The timing is particularly concerning for manufacturers because the U.S. and some other economies are beginning to reopen thanks to vaccination campaigns.

“Automotive companies initially had to bear the brunt of these shortages, but now it has spread to pretty much all parts of the consumer-electronics sector,” said Sanjeev Rana, senior analyst at investment bank CLSA in Seoul.

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Business

Grab Is in Talks to Go Public Through a SPAC Merger

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Grab Holdings Inc. is in talks to go public through a merger with a SPAC that could value the Southeast Asian ride-hailing startup at as much as $40 billion, making it by far the largest such deal on record.

The Singapore company is discussing a deal with a special-purpose acquisition company affiliated with Altimeter Capital Management LP that would value it at between $35 billion and $40 billion, according to people familiar with the matter. (Altimeter has two SPACS; it couldn’t be learned which one is in talks with Grab.)

As part of the deal, Grab would raise between $3 billion and $4 billion in a so-called PIPE, a funding round that typically accompanies a SPAC merger, the people said. That amount could still change as Grab and Altimeter will start meeting with mutual funds and other potential investors soon, some of the people said.

The parties could announce the deal in the next few weeks, though the talks could still fall apart and Grab could revert to an earlier plan to stage a traditional initial public offering on a U.S. exchange this year.

Should they move forward with a SPAC deal, it would be the high-water mark in a recent explosion of such transactions, in which an empty shell raises money in an IPO with plans to later find one or more companies to merge with. In some cases, the SPAC ends up with only a small sliver of the newly public target.

The vehicles have caught fire in the last couple of years, with everyone from former baseball player Alex Rodriguez to ex-House Speaker Paul Ryan getting in on the action. They have helped break a bottleneck between the private and public markets as companies that were reluctant to go public line up to combine with SPACs, which offer in many cases a speedier route to a listing without costs and disclosure limitations that accompany traditional IPOs.

The biggest SPAC deal to date is United Wholesale Mortgage’s roughly $16 billion combination with Gores Holdings IV Inc., announced in September. The biggest one so far this year is electric-vehicle company Lucid Motors Inc.’s agreement last month to merge with Michael Klein’s

Churchill Capital Corp.

IV, a deal valued at nearly $12 billion, according to Dealogic.

So far this year, a record $70 billion-plus has been raised for SPACs, which account for more than 70% of all public stock sales, according to Dealogic. A slew of companies are in talks for a SPAC merger or already have agreed to one, including office-sharing firm WeWork, online photo-book maker Shutterfly Inc. and online lender Social Finance Inc.

In addition to ride-hailing, Grab, which traces its roots back to 2011, delivers restaurant, grocery and other items and provides digital financial services to merchants.

Its backers include

SoftBank Group Corp.

,

Uber Technologies Inc.

and

Toyota Motor Corp.

It was last publicly valued at around $15 billion in an October 2019 fundraising round, according to PitchBook.

Its valuation is on the rise as public investors pile into other ride-hailing and food-delivery companies. Uber’s shares have jumped sharply in the past several months, while

DoorDash Inc.

went public in December at a valuation far in excess of where it had raised money privately. The restaurant-delivery company now has a market capitalization of nearly $47 billion.

Altimeter’s SPACs—Altimeter Growth Corp. and Altimeter Growth Corp. 2—raised $450 million and $400 million in October and January IPOs, respectively. Altimeter Capital, of Menlo Park, Calif., has around $16 billion under management and primarily invests in technology companies.

The firm has racked up a string of successful investments and was one of the main participants in a January round of funding

Roblox Corp.

raised ahead of its IPO at $45 a share. In its debut Wednesday, shares of the videogame platform traded more than 50% above that level and continued rising Thursday.

SoftBank, which invested through its Vision Fund, is also poised to win big on Grab, just as another of its bets proves to be a gigantic winner: The Japanese technology-investing giant has now made roughly $25 billion on paper on its $2.7 billion investment in South Korean e-commerce company

Coupang Inc.,

which soared 41% in its trading debut Thursday.

Private companies are flooding to special-purpose acquisition companies, or SPACs, to bypass the traditional IPO process and gain a public listing. WSJ explains why some critics say investing in these so-called blank-check companies isn’t worth the risk. Illustration: Zoë Soriano/WSJ

Write to Maureen Farrell at maureen.farrell@wsj.com

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