GoTo is the biggest tech IPO of 2022 after falling for 10 consecutive sessions amid a global selloff.
GoTo is the worst of the biggest tech initial public offerings (IPO) this year, according to reports, Shares of the Indonesian startup fell for 10 consecutive sessions as fears of an end to the lock-up period grew. GoTo’s post-IPO stock selloff makes it the worst-performing company among 11 internet and tech-inclined platforms that raised more than $500 million in IPO listings this year.
GoTo’s Largest Tech 2022 IPO Drawdown in Perspective
As it stands, GoTo Group stock has lost about 61% of its value since going public on the Indonesian Stock Exchange in April. The company experienced an initial share sale of approximately $1.1 billion, making it the third largest initial public offering in Asia at the time. Shares of GoTo soared 13% on its first day of trading and appeared poised to gain more momentum in the coming months. Furthermore, this large IPO development on 11 April propelled Goto to the position of the fifth largest IPO in the world at that time.
GoTo attempted to facilitate a controlling stake sale among pre-IPO backers to avoid a price crash. However, according to GoTo, the offer failed because the company’s shareholders decided not to pursue a sale at this time.
The recent slump that makes GoTo the biggest IPO underperformer among highly valued tech companies in 2022 can be attributed to a number of factors. Chief among these factors is the general fear that includes GoTo proponents. Alibaba Group Holding Limited And softbank group corporation, can sell the stake. There is talk that a pair of East Asian companies may sell a significant amount of GoTo shares after the lock-up period ends this week. This tasteless development triggered a decline in GoTo stock with most acceptable margin declines every day this week.
The market cap of GoTo, Indonesia’s biggest 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 raised $1.3 billion from investors in the first close of its pre-IPO funding round. The Abu Dhabi Investment Authority, through a wholly owned subsidiary, led the pre-IPO round and invested $400 million in Goto. Other participating investors included US tech giants GoogleChinese multinational technical group Tencent, and Temasek, the holding firm owned by the Singapore government.
At the time of the pre-IPO funding round, GoTo CEO Andre Soelistyo was upbeat about the technology opportunities in Indonesia and Southeast Asia. According to Soulistyo:
“Indonesia and Southeast Asia are some of the most exciting growth markets in the world, and the support we have received reflects investor confidence in the region’s rapidly growing digital economy and our market-leading position.”
However, the situation looks different this year with the prolonged tech selloff.
East Asian tech companies on tenterhooks
Moreover, amid the broad fall in the tech sector, several other players are also seeing a significant drop in their market cap. For example, companies with listings within the last 18 months, including India’s Zomato Limited and Hong Kong’s Sensetime Group, have also experienced stock declines. Both saw their shares held 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 competitors Grab Holdings Ltd. and PT Bukalpak.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 last August.
Tolu is a cryptocurrency and blockchain enthusiast based in Lagos. He likes to strip crypto stories down to the basics so that anyone anywhere can understand without a lot of background knowledge. When he is not delving deep into crypto stories, Tolu enjoys music, loves to sing and is an avid movie lover.
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