By
Darya Rudz
October 16th, 2023
The struggles GoTo Gojek is facing at this time take precedence from the economic strain that has left many tech stocks to take a plunge for the better part of this year.
There is an interesting twist in the shares performance of Indonesian internet company GoTo Gojek Tokopedia PT Tbk (IDX: GOTO) as Tuesday’s trading session ended with a massive gain. At the time of writing, GoTo Gojek shares are up by 14.94% to 100 Rupiah, paring off the accumulated losses it has printed over the past week.
GoTo Gojek is at a very big tipping point in its history, and Tuesday’s gains come off as one of the biggest daily trading highs it has printed since it went public in April. Besides the higher prices, the stock is changing hands, and the recorded trading volume for today is higher than the firm’s three-month average.
Over the past week and even into the early trading hours on Tuesday, the share price of GoTo Gojek was trending so low that there were worries it will breach the 50 Rupiah threshold at which point the stock exchange will suspend its trading. Before the share price rejuvenation, GoTo Gojek dropped as low as 81 Rupiah.
The rebound in the stock price might have taken its roots from the renewed bullish calls by analysts from UBS Group AG (NYSE: UBS) and BNI. These analysts revised their call on GoTo Gojek from sell to buy, with UBS arguing that the company is still trading at a higher valuation than its peers from Indonesia.
UBS’s Navin Killa said the growing valuation shows the “premium vs. peers has narrowed, making valuations attractive.” The analyst said, according to a Monday note to investors that GoTo Gojek’s “steady progress toward profitability in should help the stock re-rate.”
GoTo Gojek and the Attempt to Surmount Headwinds
The struggles GoTo Gojek is facing at this time take precedence from the economic strain that has left many tech stocks to take a plunge for the better part of this year. While the economic terrain has not exactly been favorable, the company’s share lockup periods for large investors expired last week, sending concerns that large bag holders can offload their shares at any time.
In order not to get in the crosshairs, many investors started selling off their bags, fueling the push to the coin’s All-Time Low (ATL) over the past week. Despite the almost 15% growth recorded today, the company’s shares are still about 70% down from its IPO opening price.
The company has made targeted efforts to allay the fears of its shareholders that it has enough capital reserve to see through its most distressing times.
“As for the latest bounce, the volumes that are traded are much higher than the daily average. It could be speculation that a white knight could be entering the fray,” said Nirgunan Tiruchelvam, an analyst at Aletheia Capital. “Alternatively, the core holders may be bolstering their position.”
As part of the company’s efforts to cut down on costs, GoTo Gojek laid off as many as 1,300 staffers or 12% of its global workforce.