GoTo Group, Potentially A Bad Investment Given Its Current Market Condition

GoTo Group, one of Indonesia’s largest holdings companies, is no longer an attractive stock for investors. This is because ever since the company went for its ICO, its stocks have continued plummeting.

The company has not been performing well at all and the investors are advised to stay away from it.

GoTo Group’s Valuation has plunged

The latest data gathered from the company suggests that its valuation has plunged by 68.5% from the time it first went for the initial public offering (IPO). The company reportedly held its IPO in April 2022.

At the time of the ICO, the total valuation of GoTo was around $28 billion, translating to 400 trillion Indonesian rupiahs.

From the time of the ICO until now, the valuation of the company has plummeted to $8.82 billion. This means that the stock prices for the company have continued plummeting ever since its public debut.

Even if the value of the company had dropped by 25%-35%, it could be suggested to buy the company’s stock. In that case, there would have been hope for the company to make a comeback.

From the looks of it, the company will continue losing its valuation over the months. It suggests that the company may end up losing its market worth and its stock may hit bottom.

Pre-IPO Shareholders Caused a Problem

The major blow was dealt to the company due to the pre-IPO shareholders. It happened because the pre-IPO shareholders did not go for the secondary offering, reportedly opting out of it.

This caused a major sell-off for the GoTo shares and the company has not recovered since then. After that, the company’s shares have continued plummeting but at a slower rate.

GoTo Group was formed after the merger of two of the largest companies from the tech sector. The first company is Tokopedia, an e-commerce giant, and the second company is Gojek, a ride-hailing giant.

Both companies have giant empires in Indonesia, considered the largest entities in their respective sectors in the country.

Major Early Investors

The major early investors of the GoTo Group were Alibaba and SoftBank. These companies were the major investors supporting the company grows larger in the Asian continent.

They had also agreed to a lock-up period that would stick around for eight months. This was their way of assuring the company that they were not going anywhere and they would keep supporting it.

With their support and backing, the company was able to witness a surge in its stock prices but that was for a brief period. They had agreed that they would also support the IPO for GoTo Group.

Secondary Offering Deal Fell Through

Just as the eight-month period was coming to an end, the GoTo Group officials tried to convince the pre-IPO shareholders to stick with them.

They wanted to propose a secondary offering to these shareholders, offering them new shares. If the shareholders were to accept the deal, the secondary offering would have been a success.

As a result, the GoTo Group could have continued benefiting from the support offered by the shareholders. Unfortunately, things did not go accordingly in favor of GoTo Group and the shareholders pulled out.

They completed their lock-up period and were pulled from the company after it expired in November.

GoTo Group Shares Continue Plummeting

Since the start of November, the share prices for GoTo Group have continued to decline. Even today’s stock trading session has witnessed a 7% drop in the company’s share prices.

The latest trading value of the GoTo Group shares is worth 123 rupiahs, which translates to $0.0080 per share.

GoTo Group is not the only company in the same sector that has suffered from great losses. Grab, a competitor of the company has also lost 69% of its overall valuation since its December 2021 listing.