Jakarta. The shares of tech conglomerate GoTo Gojek Tokopedia (GOTO) plummeted to an all-time low of Rp 50 on Thursday. Although the stock briefly touched Rp 51, it quickly fell back to Rp 50, which is less than 1 cent.

GOTO's stock has been under significant pressure. The general meeting of shareholders (RUPS) held on June 11 failed to lift the stock's performance. Over the past month, the stock has dropped 24.24 percent, and in the last three months, it has fallen 30.56 percent.

If GOTO shares remain at the Rp 50 level for approximately six months, they risk being placed on the full call auction (FCA) special monitoring board. One of the criteria for this board is that the average share price over the last six months in the regular market is below Rp 51.

The phenomenon of GOTO shares reaching the Rp 50 mark has sparked reactions from former Indonesia Stock Exchange (IDX) president director, Hasan Zein Mahmud. He commented on this situation, saying, "The GOTO phenomenon is concrete empirical evidence of how irrational the stock market can be and how illogical investors can behave."

Hasan, the author of "Reliable Investment Strategies in the Capital Market" and "Guidelines for Profiting in the Capital Market," has been a vocal critic of GOTO leading up to its initial public offering (IPO). He noted that venture capitalists and conglomerates rushed to acquire GOTO shares before the IPO. Some invested directly in shares, while others used mandatory convertible bonds (MCBs), including telecommunications operator Telkomsel. Other notable investors included SVF GT Subco (Softbank) and Taobao (Alibaba).

"These investors put in varying amounts, but I estimate that they, especially anchor investors, invested at an average price above Rp 200 per share before the GOTO IPO. Those who bought at the IPO paid Rp 338 per share," Hasan explained.

At that time, GOTO was losing tens of trillions of rupiah. According to Hasan, the prospectus predicted that GOTO would suffer losses of tens of trillions of rupiah for several years. GOTO seemed uncertain about its ability to turn a profit.

GOTO has had to undertake private placements or rights issues periodically to maintain cash flow and ensure operational continuity. "They are racing to burn money, chasing gross transaction value (GTV) growth at the expense of profitability," Hasan added.

Improvement in Performance, But So What?

Despite GOTO's efforts to reorient its business, redefine its core operations, divest its e-commerce unit Tokopedia to China's Bytedance to improve cash flow, and enhance efficiency, the stock price continues to decline.

"All-time low after all-time low has brought GOTO's share price to the demarcation line of Rp 50," Hasan remarked.

He noted that despite a 22 percent increase in revenue, a 76 percent reduction in losses, improved cash flow, and positive EBITDA, these improvements seem meaningless in assessing business prospects and investment decisions. "Between making a profit and maintaining common sense, I choose the latter," he concluded.

Recently, on June 11, GOTO held its annual and extraordinary general meeting of shareholders (RUPST-LB). Shareholders approved several strategic plans. Among the agenda items discussed, shareholders agreed to a crucial point: the buyback of 10.26 billion shares, representing 0.85 percent of the capital. The company allocated US$ 200 million or Rp 3.2 trillion from internal cash to execute this action.

The buyback will be conducted over a 12-month period, from June 12, 2024, to June 11, 2025. The company will halt the buyback if management deems it necessary.

The shareholders also accepted the resignation of co-founder Andre Soelistyo from his position as a commissioner of GOTO.