Key facts
- GoTo Gojek Tokopedia shares fell 14% to 43 rupiah in early Jakarta trading.
- The Indonesia Stock Exchange removed its 50 rupiah minimum share price on Monday.
- More than 40 stocks on the IDX composite index traded at or below 50 rupiah on Monday.
- GoTo's market capitalization fell below US$3 billion.
- GoTo's share price had been stuck at 50 rupiah for about four months.
- MSCI removed GoTo from its stock indices last month due to liquidity requirements.
GoTo Gojek Tokopedia shares plunged 14% to 43 rupiah in early Jakarta trading on Monday after the Indonesia Stock Exchange (IDX) eliminated its 50-rupiah minimum share price. The move, which took effect on the first trading day of the week, aims to improve liquidity in the Indonesian stock market but has unleashed pent-up selling pressure on stocks that had been trading at or below the mandated minimum for months.
The IDX's composite index fell 1.51% on the day, with more than 40 stocks trading at or below the 50-rupiah level. The price floor, in place for over a decade, is uncommon among major markets, which typically use trading halts or circuit breakers to manage volatility. Investors had complained that stocks at the minimum price became effectively untradable.
GoTo, once one of Indonesia's most valuable companies with a market capitalization exceeding US$32 billion shortly after its April 2022 listing, has seen its value decline due to sustained losses from competition. Despite posting its second consecutive quarterly profit in July following restructurings, investor enthusiasm has waned. MSCI removed GoTo from its stock indices last month due to liquidity concerns.
Wilbert Arifin, an analyst at Mirae Asset Sekuritas Indonesia, stated that the coming months will test whether the current selloff is purely technical or also reflects fundamental and valuation questions for the company. GoTo, backed by Alibaba Group Holding Ltd, acknowledged a disconnect between its current share price and underlying business strength, emphasizing its focus on performance to deliver long-term shareholder value.