HONG KONG – Shares of GoTo Group plummeted the most on record after one of its co-founders trimmed his stake in a share sale, spurring concerns about the business prospects of a South-east Asian industry bellwether.
Indonesia’s biggest technology firm plunged as much as 19.4 per cent on Monday after Mr William Tanuwijaya disclosed that he had unloaded 332 million shares of the company late on Friday, reducing his slice of the company to 1.72 per cent from 1.77 per cent.
GoTo trimmed losses and was down about 9 per cent in late morning trade.
The disclosure coincided with the completion of a private placement involving as many as 17.05 billion new shares.
GoTo shares closed 1.5 per cent lower on Monday.
The company was formed in 2021 in a merger between Indonesia’s two most valuable start-ups – ride-hailing giant Gojek and e-commerce firm Tokopedia.
Investors have pummelled GoTo this month after concerns mounted about the market environment in its main businesses of ride hailing and e-commerce, dogged by stubbornly weak consumption and intensifying competition.
GoTo has shed roughly US$1.5 billion (S$2.1 billion) of value over at least five losing sessions up to Monday morning. The shares are down more than 70 per cent from their November high, after the company was hit by foreign fund outflows from its home country.
Some investors regarded the private placement as a warning about an urgent need for capital, JPMorgan analysts wrote on Monday.
There is also uncertainty over the regulatory environment in Indonesia, after the government outlawed e-commerce on social media, a move that dealt a blow to ByteDance’s TikTok but also raised questions about its approach to Internet innovation.
“There is some misperception that the Non-Preemptive Rights Issue is seen as a sign of weakness,” analysts including Mr Henry Wibowo wrote in a brief research note, maintaining an overweight rating on GoTo.
GoTo in August cut its 2023 loss projection after staunching some of the bleeding in the second quarter, taking it closer to a goal of getting into the black after an era of costly expansion.
Mr Patrick Walujo took over as chief executive in June and is now carrying out his predecessors’ campaign to shave losses by cutting jobs, curbing promotional spending and tightening expense controls.
Like rivals Grab Holdings and Sea, the Indonesian company is trying to generate cash after years of rapid growth. BLOOMBERG
