Coupang sets partial early lockup release; CEO sells $42 mn in shares

South Korea’s e-commerce giant Coupang Inc. has announced an early stock lockup release to occur at the open of trade on Mar. 18 on the New York Stock Exchange.

According to the company’s IPO prospectus, conditions were satisfied for a lockup release of some 34 million shares held by Coupang's executives and employees, and their shares will be eligible for trade from Thursday local time.

Such shares account for 4.8% of a total of 698.7 million outstanding shares. Other lockup restrictions remain in place.

Under pressure of a possible share overhang, Coupang shares finished down 6.58% at $47.13 on Tuesday.

One of Asia’s largest e-commerce companies, Coupang made a successful trading debut on the NYSE last week.

Coupang went public at $35 apiece on Mar. 11, opening for trade at $63.5 and then settling in to close at $49.25. The firm’s market capitalization, having once exceeded $100 billion, has declined to around $80.8 billion.

Established in 2010, the company has offered its executives and employees stock options that allow them to exercise their rights to receive the company’s stock at $1.95 a share.

CEO DIVESTS OF PART OF HIS STAKE

Under terms laid out in the prospectus, Coupang founder and Chief Executive Kim Bom-suk has unloaded part of his stake after the IPO.

According to a filing to the US Securities and Exchange Commission on Mar. 15, Kim sold 1.2 million Class A stocks of the company at $35 apiece, which totaled $42 million.

He converted part of the Class B shares into Class A shares for the stake sale as stipulated by US regulations. Coupang’s Class B shares give him 29 times more voting rights than Class A shares, and following his first divestment, Kim’s voting rights fell to 76.2% from 76.6%.

Constellation Research’s chief analyst Ray Wang said Coupang has growth potential as it focuses on expanding its delivery network for long-term growth rather than short-term profit.

According to a report by US venture capital firm Goodwater Capital, Coupang has expanded its presence in South Korea's e-commerce market, accounting for 24.6% in 2020, versus 18.1% in 2019. Last year, Coupang's customers spent 346% more money on its platform than they did in 2017.

Write to Jae-Kil Cho at road@hankyung.com
In-Soo Nam edited this article.