JAKARTA — MSCI Inc. removed GoTo Group from its indices Wednesday after the Indonesian ride-hailing and food delivery platform spent roughly three months with its stock price fixed at 50 rupiah — less than one U.S. cent and the minimum permitted under Jakarta Stock Exchange rules.
The index provider cited rising complaints from asset managers unable to trade GoTo shares because of the price floor. MSCI had previously frozen changes for GoTo in its May review, flagging index replicability problems tied to the stock's illiquidity. Efforts by MSCI to persuade the Indonesian bourse to lift its price floor failed.
GoTo commanded a market capitalization exceeding $32 billion shortly after its April 2022 Indonesian listing. That figure has since fallen to approximately $3.2 billion.
The removal adds to years of setbacks for GoTo, which absorbed heavy losses during sustained competition from rivals including Grab Holdings Ltd. Despite that pressure, the company posted its second consecutive quarterly profit after a series of restructurings and leadership changes.
GoTo's exclusion may add further pressure to Indonesia's broader stock market, which has already fallen about 27 percent this year. That decline accelerated after MSCI issued a warning in January regarding a potential market-status downgrade for the country.
GoTo constituted about 4 percent of the MSCI Indonesia Index at the end of July. Passive funds tracking that index now face difficulty exiting their positions: the number of sellers is likely to far exceed buyers, trapping institutional capital in a stock that cannot clear.
Angus Mackintosh, an analyst at Aletheia Capital, described GoTo as "an unfortunate story of a national champion that fell from grace." He said the MSCI removal "will make little difference given it has already been effectively suspended. It cannot go any lower."
Even so, the mechanics of index removal force passive funds to attempt rebalancing regardless of liquidity conditions. The price floor constrains actual selling, but the structural impairment to that segment of the market is real.
Hans Patuwo assumed the role of GoTo's chief executive at the end of last year, following a campaign by prominent shareholders to replace his predecessor. Investor enthusiasm for GoTo had previously faded over concerns about its path to profitability and financial discipline.
The company also saw no progress in years-long takeover talks with Singapore-based Grab. Alibaba Group Holding Ltd. remains a backer of GoTo.
