Some IDX IPOs Quietly Buy Their Own Stock Back in the First Month. That's the Greenshoe Option
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5 min read
Over three trading days in April 2022, a securities firm spent Rp2.02 trillion buying back shares of GoTo Gojek Tokopedia (GOTO), a stock that had only just listed on the Indonesia Stock Exchange (IDX) (Bisnis.com). That wasn't a bailout and it wasn't panic buying. It was the greenshoe option, a standard, regulated mechanism that lets an IPO's underwriter support a new stock's price in its first month of trading, and it is used far more often than most retail investors realize.
A greenshoe option, also called an over-allotment option, is a clause built into an IPO's underwriting agreement. It gives the underwriter a temporary, regulated window to step into the market and buy back shares if the new stock trades below its own IPO price right after listing (Stockbit Snips). The name comes from the Green Shoe Manufacturing Company, the first issuer in the United States to use this exact structure in its own 1963 IPO (Wikipedia).
The point isn't to guarantee the stock never falls. It's to give the market a known buyer standing by during the most fragile stretch of trading, the weeks right after a company's very first public price is set.
In Indonesia, price stabilization through a greenshoe scheme is governed by Otoritas Jasa Keuangan (OJK) Regulation No. 6/POJK.04/2019 on Price Stabilization to Facilitate Public Offerings (OJK, via peraturan.bpk.go.id). Two limits define how far the mechanism can go: the securities firm appointed as stabilization agent can buy back up to 15% of the total IPO shares, and it only has 30 days from the listing date to do it (Stockbit Snips). The buyback price itself is capped too: the agent cannot pay more than the official IPO offer price.
Once that 30-day window closes, the stabilization agent has no further mandate to step in. Whatever demand and supply exist for the stock from that point on are the real thing, with no underwriter standing behind the price.
GoTo listed on IDX on 11 April 2022 at an IPO price of Rp338 per share, debuting up 13% at Rp382 (GoTo Company). By mid-April the stock had drifted back down toward its offer price, and its appointed stabilization agent, PT CGS-CIMB Sekuritas Indonesia, stepped in.
On 20 April 2022, the agent bought roughly 1.22 billion GOTO shares at Rp338, worth about Rp413 billion (Katadata). It bought again the next day, then a third time on 22 April, buying roughly 3.46 billion more shares at an average price of Rp336.27 (Bisnis.com). Across all three days, the agent had bought 6.00 billion shares, almost the entire 6.09 billion share pool set aside for the scheme, or 98.49% of it, spending Rp2.02 trillion in total (Bisnis.com).
That is what a greenshoe stabilization looks like when it is actually exercised at scale: a specific, disclosed, time-limited buying program, not a rumor.
It's tempting to read heavy stabilization buying as a vote of confidence. Read it more carefully instead. A large greenshoe purchase means the stock needed support to hold near its IPO price, not that it didn't. GoTo's own subsequent history, including a sharp drop once its separate lock-up period expired seven months later, shows why a stock propped up during its greenshoe window can still fall hard once that support, and other supply constraints, are gone. NetWort has covered that specific event in detail in how GoTo's IPO lock-up expiry moved its stock with no new bad news at all.
The greenshoe window and the lock-up period are two separate mechanisms with two separate expiry dates, and both are worth checking on any IDX stock still inside its first year of trading.
Three things separate a real signal from the mechanical kind, on any recent IDX listing:
NetWort's ticker directory lists every IDX, US and crypto asset the platform tracks, including GoTo, with current price and trading data in one place. Pull up GoTo's own asset page to see how the stock has actually traded since April 2022, well past the three-day buying program described above.