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Analysts lukewarm about GoTo IPO, caution against overhype
Analysts have cautioned investors about jumping on the GoTo IPO bandwagon, considering that tech stocks have not done well recently due to overhype.
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Stock image of the GoTo logo (GoTo /Public relations)
S
ome stock analysts have shown a lukewarm response to the initial public offering (IPO) of homegrown tech decacorn GoTo following the IPO flop of competitor Bukalapak.
Analysts told The Jakarta Post that the GoTo IPO was laden with risks, as overhyped investors might flock to buying up shares of the fundamentally unproven company by banking on its future growth.
GoTo posted a loss of Rp 7.59 trillion (US$528.37 million) in July 2021, down from the Rp 10.05 trillion loss it posted in July 2020, according to its IPO prospectus. The prospectus explicitly states that GoTo “cannot guarantee that the company will post a net profit in the coming future”.
Capital market analyst Edwin Sebayang, citing a financial projection made by one of the lead underwriters of the GoTo IPO, said the tech firm was estimated to book a loss of Rp 24 trillion in 2024.
“How will they [distribute] dividends if they are expected to post an Rp 24 trillion loss by 2024?” he said.
Through its IPO on the Indonesia Stock Exchange (IDX), GoTo aims to raise Rp 17.99 trillion, much less than the Rp 21 trillion Bukalapak raised through is IPO.
With each share priced between Rp 316 and Rp 346, GoTo aims to reach a market cap of between Rp 376.6 trillion and Rp 413.7 trillion to become the fourth largest publicly listed company on the local bourse after private lender BCA, state-owned Bank Rakyat Indonesia (BRI) and state-owned PT Telkom Indonesia.
