GoTo Assures Investors It Has Enough Cash to Reach Profitability

  • In Business
  • 2022-12-08 08:47:42Z
  • By Bloomberg

(Bloomberg) -- GoTo Group said it has enough funds to last until it reaches profitability, trying to alleviate investor concerns about its financial health following a 70% slump in its stock price.

Most Read from Bloomberg

  • Putin Calls Russian Nukes Deterrent Factor, Says War Risk Rising

  • Peru's President Accused of Coup After Move to Dissolve Congress

  • Why Did So Many US Men Quit Working? Social Status May Hold the Key, Study Says

  • Be Careful, Here Come the Predictions for 2023

  • Musk Spars With San Francisco Over Probe of Bedrooms at Twitter

"Our balance sheet is sufficiently healthy to take us to profitability," Chief Financial Officer Jacky Lo told investors in an online meeting on Thursday. The Indonesian internet company expects "to be able to accelerate" its breakeven timeline, will curb expenses and is considering selling non-core assets, he said.

Shares of GoTo have suffered as a lockup on its major shareholders' stakes expired at the end of November, freeing early backers to reduce their holdings. The ride-hailing and e-commerce provider faces intensifying competition from rivals such as Grab Holdings Ltd. and a deteriorating global economy. GoTo is about six quarters away from a cash crunch, Aletheia Capital said, recommending investors sell the stock.

GoTo said last month it's cutting 12% of its workforce, or 1,300 jobs, after its losses mounted. Like technology companies worldwide, GoTo is confronting the effects of stiffer competition, economic slowdown and heightened investor focus on the bottom line. The risk of customers becoming more budget-conscious in the face of an impending recession has triggered job cuts, closures of business units and other measures across the tech industry.

"We will continue our disciplined approach to reducing operating expenses, which we are confident will result in continuous sequential improvement in our monthly cash burn," Lo said. "We may also consider divesting some of our non core assets and also investment portfolio and we will not make any new investments that do not contribute to an acceleration of our profitability."

The stock plunged by 6.5% to 100 rupiah in Jakarta trading - close to the daily limit - leaving it down 70% since its April debut. Indonesia's largest tech company now has a market value of about $7.6 billion.

Early backers such as Alibaba Group Holding Ltd. and SoftBank Group Corp. were held to an eight-month lockup expiring Nov. 30 to support the stock price following the company's initial public offering. GoTo's plan to facilitate controlled stake sales by pre-IPO backers - aimed at avoiding a bigger selloff at once - didn't come to fruition.

Formed via a merger of ride-hailing provider Gojek and e-commerce firm Tokopedia, GoTo raised $1.1 billion in one of this year's largest IPOs.

--With assistance from Yoolim Lee, Norman Harsono, Soraya Permatasari and Yudith Ho.

Most Read from Bloomberg Businessweek

  • Airbus Is Coming for Boeing's 737

  • China Is the Wild Card for Global Inflation in 2023

  • The Cult of the Retail Trader Has Fizzled

  • The Viral List That Turned a Yale Professor Into an Enemy of the Russian State

  • The Club With a 60,000-Woman Waitlist

©2022 Bloomberg L.P.


More Related News

UBS Profit Beats Expectations as Rates Offset Trading Slowdown
UBS Profit Beats Expectations as Rates Offset Trading Slowdown

(Bloomberg) -- UBS Group AG reported fourth-quarter profit that beat expectations and said it plans to buy back more than $5 billion of shares this year, as ...

Ardian Opens Abu Dhabi Office to Tap Sovereign Wealth
Ardian Opens Abu Dhabi Office to Tap Sovereign Wealth

(Bloomberg) -- Paris-based private equity firm Ardian SAS is opening an office in Abu Dhabi to tap opportunities across the region where cash-rich sovereign ...

Alibaba Loses $23 Billion in One Day in Sign Rally Is Easing Off
Alibaba Loses $23 Billion in One Day in Sign Rally Is Easing Off

(Bloomberg) -- A market-beating rally by Alibaba Group Holding Ltd., a bellwether for a recovery in Chinese consumer spending, is fueling doubts that the...

Food Giant Wilmar Vows to Stand By Its Venture With Adani Group
Food Giant Wilmar Vows to Stand By Its Venture With Adani Group

(Bloomberg) -- Food giant Wilmar International Ltd. will continue to support its joint venture with India's under-fire Adani Group, saying a report from...

Adani's $2.5 Billion Share Offering Faces Critical Final Day

(Bloomberg) -- Tuesday marks a critical day for Asia's richest man Gautam Adani as his flagship firm closes books on a 200-billion rupee ($2.5 billion) share...

Leave a Comment

Your email address will not be published. Required fields are marked with *

Cancel reply


Top News: Business