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Coupang goes public on the NYSE in the US.
Coupang announced on the 12th (local time) that it had filed a report with the U.S. Securities and Exchange Commission (SEC) in accordance with Form S-1 for the listing of Class A common shares (hereinafter referred to as shares ordinary).
The number of common shares to be traded and the range of offering prices are still undecided. Coupang plans to list its common shares on the New York Stock Exchange (NYSE) under the ticker code ‘CPNG’. Coupang is known to select Goldman Sachs as the listing organizer and conduct a corporate briefing (IR). The target of the listing promotion is expected to be Coupang LCC (a US corporation), a parent company that has a 100% stake in Coupang.
After listing, Coupang’s corporate value is estimated to reach 30 trillion won. Bloomberg recently reported on the possibility of listing Coupang and predicted that “the value of the company will be estimated at around $ 30 billion (about 33 trillion won).” There is also a forecast that will be around $ 25 billion due to the accumulated deficit of Coupang.
Founded in 2010, Coupang has grown into the largest e-commerce platform in Korea. It is shaking up the industry by delivering fresh food alongside daily necessities and industrial products through early morning delivery and same day delivery. Additionally, it introduced Coupang Itz food delivery service and Coupang Play real-time video streaming service. In addition to Seoul, it has offices in Silicon Valley, Seattle, Los Angeles (LA), Beijing, China, Shanghai and Singapore.
Coupang has consistently revealed his willingness to list on the United States stock market. Bum-seok Kim, founder of Coupang (currently chairman of the board of directors), said at a press conference in 2011, a year after its establishment, “We are going to be listed directly on NASDAQ. Coupang’s succession of hiring the former director of the Federal Reserve (Fed) Kevin Wash, Alberto Ponaro, Chief Financial Officer (CFO) and Chief Accounting Officer Michael Parker (CAO) in October 2019, led to the interpretation that it was to be listed on the NASDAQ. Coupang initially lobbied to list on NASDAQ, but this time, it went through the NYSE listing process.
If the listing is successful, Coupang LCC’s main shareholder, Son Jeong-eui, Chairman of the Softbank Group Vision Fund, is expected to launch Coupang’s “exit strategy” in earnest. Softbank’s Vision Fund has a 37% stake in Coupang by investing $ 2.7 billion in Coupang in the third quarter of last year.
Will the price in the US exceed the deficit?
It is also read that the price of Coupang has been calculated to overcome the deficit trend. Coupang continued its deficit until 2019 right after its establishment. However, the size of the deficit, which exceeded one trillion won, decreased to 700 billion won in 2019. Starting next year, a full-fill service (a full-fill service, a logistics company contracted by a marketing company and in charge of all processes such as delivery, storage, packaging, delivery, inventory management, exchange and return service, etc.) will be operated to improve profitability and is expected to come out.
“Coupang is expanding full archive services by starting a rocket alliance service that handles the warehousing and delivery of products from open market vendors and the response to customer service,” said Kim Myung-ju, researcher at Mirae Asset. Daewoo. Serious archiving service as a reinforcement. “Currently, the Rocket Alliance rate is estimated to be more than double the existing store rate.
There is also a worrying opinion. This is because anti-Coupang alliance movement is detected, as Jung Yong-jin, vice president of Shinsegae Group, which operates e-commerce platform SSG.com, visited Naver, the number one portal in Korea. Also, the domestic market may change depending on who is acquiring eBay Korea, the number one e-commerce company for sale.
Eleventh Avenue, an e-commerce platform operated by SK Group, is also taking shape in cooperation with Amazon. It may be difficult to view the situation optimistically from the perspective of Coupang, who has yet to exert a clear influence outside of Korea. For this reason, it is noted that to be successful in trading, market pessimism must be eliminated by dramatically improving earnings.
Park Eun-kyung, a researcher at Samsung Securities, said: “Coupang sales in 2019 grew 64% year-on-year, while the operating loss was 720 billion won, a reduction of 36% compared to the previous year, which caused a break in pessimism ”. The effect of operating leverage was expected to turn black due to the higher proportion of profitable commission sales such as market, advertising and full presentation.
