(Nov 30): Shares of GoTo Group plunged to a record low as a lock-up on its major shareholders’ stakes neared expiry, suggesting investors are expecting some of them to reduce their holdings.
The stock fell as much as 6.8% in Jakarta trading and headed for its eighth straight daily drop, leaving it down 55% since its initial public offering in late March. Indonesia’s largest tech company now has a market value of about US$11 billion.
Early backers such as Alibaba Group Holding Ltd and SoftBank Group Corp agreed to an eight-month lock-up expiring Nov 30 to support the stock price following the IPO. GoTo has been trying to avoid a situation where a large part of the backers would seek to cash out at the same time, attempting a novel plan to find buyers for controlled sales of their stakes.
Yet on a conference call last week, chief executive officer Andre Soelistyo said that there were no assurances that such a controlled share sale will take place.
About one trillion GoTo shares, or more than 90% of the total outstanding, are becoming eligible to be sold. Still, that includes holders such as GoTo’s employee fund that are unlikely to sell. Alibaba and SoftBank each own about 9% of GoTo.
Formed via a merger of ride-hailing provider Gojek and e-commerce firm Tokopedia, GoTo raised US$1.1 billion in one of this year’s largest IPOs. The share sale boosted the value of stakes of China’s Alibaba and SoftBank’s Vision Fund to almost US$5 billion combined.
In late June, Chinese artificial intelligence software maker SenseTime Group Inc slumped as much as 51% in Hong Kong trading after a lock-up of its shares expired following its December IPO.