For three weeks straight, Marina Budiman became roughly $350 million richer each day.
By mid-March the president commissioner of Indonesia’s biggest data center operator sat atop a $7.5 billion fortune after her company’s shares repeatedly soared by the daily limit, making her the nation’s wealthiest woman, according to the Bloomberg Billionaires Index.
Then the stock of DCI Indonesia crashed. In just three days, Budiman’s net worth fell by half, adding yet another boom-and-bust stock run to Indonesia’s sizable tally.
All told, Budiman and fellow billionaires and DCI controlling shareholders — Otto Toto Sugiri and Han Arming Hanafia — saw their combined fortunes soar by over $17 billion before they plummeted. At Tuesday’s close, the shares had given up more than half the gains since the rally began in mid-February.
Wild price swings in stocks are a common and increasingly problematic feature of Indonesia’s equity market. Dozens of firms have moved by 1,000% or more in recent years, their shares seemingly unshackled from the underlying financials. DCI closed on Tuesday with a market value of close to $17 billion, compared to last year’s revenue of $112 million and $49 million profit. The company trades at 416 times earnings, the highest relative to a group of peers tracked by Bloomberg.
Partly to blame are the large number of companies whose shares are thinly traded. Budiman, Sugiri, Hanafia and a fourth large owner, billionaire tycoon Anthoni Salim, hold 78% of DCI’s shares. Of the 2.4 billion outstanding, 80,400 shares changed hands by midday Wednesday in Jakarta compared with millions at companies in Indonesia of a similar size.
DCI did not immediately respond to a request for comment.
DCI’s price swings “are largely a function of its tight free float,” said Mohit Mirpuri, a fund manager at SGMC Capital Pte in Singapore. “Bid-offer spreads are narrow, so any substantial positioning can move the stock significantly,” Mirpuri said.
DCI was the worst performer as Indonesia’s benchmark stock index plunged on Tuesday and triggered a 30-minute suspension. Traders attributed the overall decline to factors including concerns over President Prabowo Subianto’s populist measures, forced liquidations and uncertainties over the finance ministry’s leadership.
“The selloff has been a bolt from the blue in many ways — the suddenness has caught the market by surprise,” said Nirgunan Tiruchelvam, an analyst at Aletheia Capital in Singapore.
Before the reversal in recent days, DCI may have benefited from investors betting that demand for data centers will continue to grow and help drive foreign investment. For example, Oracle Corp. is in discussions with Indonesia’s government to establish a cloud services center in the country, Bloomberg News reported Friday.
Budiman, 63, helped co-found DCI over a decade ago. Sugiri, 71, and Hanafia are also co-founders.
This story was originally featured on Fortune.com
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