GoTo is the worst large tech IPO of 2022 after plunging for 10 consecutive sessions amid the global selloff.
GoTo is the worst of the largest tech Initial Publis Offerings (IPO) this year, according to reports. The shares of the Indonesian startup plunged for 10 consecutive sessions as fears regarding an expiring lock-up heated up. GoTo’s post-IPO stock selloff makes it the worst-performing company among 11 internet and tech-inclined platforms that generated over $500 million in IPO listings this year.
GoTo Largest Tech 2022 IPO Drawdown in Perspective
As it stands, GoTo Group stock has lost around 61% of its value since it went public on the Indonesian Stock Exchange in April. The company experienced an inaugural share sale of approximately $1.1 billion, making it the third-largest initial public offering in Asia at the time. GoTo shares soared 13% on their first day of trading and appeared set to gain more momentum in the coming months. Furthermore, this lofty IPO development on April 11th catapulted GoTo to the position of fifth-largest IPO in the world at the time.
GoTo attempted to facilitate a controlled stake sale among pre-IPO backers to avoid a price drop. However, according to GoTo, this proposal fell through as the company’s shareholders decided not to sell at this time.
The recent downturn that makes GoTo the largest IPO underperformer among highly-valued tech companies in 2022 could be attributed to several factors. Chief among these factors is the general fear that GoTo backers, including Alibaba Group Holding Ltd and SoftBank Group Corp, could sell stakes. Talks abound that the duo of East Asian companies could offload a sizable amount of GoTo shares after concluding the lock-up period this week. This unsavory development triggered a plunge in GoTo stock every day this week with the most allowable margin decline.
The market cap of GoTo, Indonesia’s largest tech company, is now down $22 billion from its June peak.
GoTo Raises $1.3B in Pre-IPO Funding Round
In November last year, GoTo secured $1.3 billion from investors in the first close of its pre-IPO funding round. Abu Dhabi Investment Authority led the pre-IPO round through a wholly-owned subsidiary and invested $400 million into GoTo. Other participating investors included US tech giant Google, Chinese multinational tech conglomerate Tencent, and Singaporean government-owned holding firm Temasek.
At the time of the pre-IPO funding round, GoTo CEO Andre Soelistyo was enthused about the tech opportunities in Indonesia and Southeast Asia. According to Soelistyo:
“Indonesia and Southeast Asia are some of the most exciting growth markets in the world, and the backing we’ve secured shows the confidence that investors have in the region’s rapidly expanding digital economy and our market-leading position.”
However, the situation seems different now with the prolonged tech selloff this year.
East Asian Tech Companies on Tenterhooks
Furthermore, amid the broader decline in the tech space, several other players are also seeing significant drawdowns to their market cap. For example, companies with listings within the past 18 months, including India’s Zomato Ltd and Hong Kong’s Sensetime Group, have also experienced a stock decline. The duo saw their shares dive in light of initial public offerings, which allowed early investors to sell stakes.
Other East Asian tech companies wallowing in the global tech selloff include Competitor Grab Holdings Ltd and PT Bukalapak.com. The former is down 65% since its listing in New York, while the latter, an online marketplace platform, is down 67% since its Jakarta debut in August last year.
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