GoTo Gojek Tokopedia Shares Plunge After Indonesia Scraps Stock Price Floor

Shares of GoTo Gojek Tokopedia (GOTO) plunged 14.0% on Monday, hitting their lower trading limit after the Indonesia Stock Exchange (IDX) abolished its minimum share price rule. The stock immediately fell to IDR 43 as the rule change unleashed a wave of selling from investors who had been unable to exit their positions for months.

Regulatory Change Unlocks Selling

The sell-off was directly triggered by the IDX's decision to lower its minimum share price floor from IDR 50 to IDR 1 per share, effective today. For approximately four months, GOTO's stock had been frozen at the IDR 50 level, a floor established over a decade ago to protect investors from sharp declines.

This price floor had effectively made the stock untradable, creating significant pent-up selling pressure. With the removal of the floor, the stock promptly hit its auto-rejection lower (ARB) limit of 14% within minutes of the market opening, according to exchange data.

Broader Market Impact

The regulatory shift had wider implications beyond GOTO, pressuring the broader Indonesian market. The Jakarta Composite Index (IHSG) declined 0.51% at the open as the new price regime came into effect.

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More than one hundred of the exchange's 900-plus listed companies were trading at or near the former IDR 50 floor. The rule change allows these stocks to find new, lower price levels, impacting a significant portion of the market.

Context for GoTo

GoTo, which is backed by Alibaba Group, was once one of Indonesia's most valuable technology firms, with a market capitalization that exceeded US$32 billion after its 2022 initial public offering. However, the company has since struggled with heavy losses amid intense competition from rivals like Grab Holdings.

While a series of restructurings have recently helped the company achieve quarterly profits, investor sentiment has remained weak. The company's prior removal from the FTSE Global Equity Index Series and the risk of exclusion from MSCI indexes have also suppressed liquidity and institutional interest in the stock.