Coupang’s share price rebounds as market digests lockup release

Shares of Coupang Inc., widely seen as the South Korean version of global e-commerce giant Amazon.com, are staging a rebound as the market is gradually digesting a heavy stock lockup release that began in early September.

On the New York Stock Exchange, Coupang closed up 2.5% at $30.23 on Dec. 23.

Over the past six months, the stock had fallen nearly 21%, but in the past week, it has climbed 12.2%, raising hopes that the worst may be over.

The first Korean company to directly list on the NYSE in March this year, with its market capitalization once exceeding 100 trillion won ($100 billion), has stayed below its initial public offering price of $35 since it fell to its lowest level of $25.06 in late November.

Industry watchers said the stock is still under pressure as the volume of shares that could be traded following the Sept. 7 lockup release amounts to 83% of its total shares outstanding.

In mid-September, Vision Fund, led by SoftBank Group founder Masayoshi Son, sold one-tenth of its shares in the Korean e-commerce giant for $1.69 billion.

After the divestment, Vision Fund holds 568.2 million shares of the second-largest e-commerce player in South Korea.

Other major investors in Coupang include Greenoaks Capital Partners, Maverick Capital, BlackRock and Morgan Stanley.

LONG-TERM INVESTMENT

However, signs are growing that investors are now looking at the loss-making company from a long-term perspective.

“When its platform business starts to work in overseas markets as it did in Korea, investors will revalue the stock,” said Korea Investment & Securities analyst Kim Myung-joo. “Coupang is leading the online market shakeup. There’s no doubt about it.”

Since its launch, Coupang has closely followed Amazon’s business model, which is to use most of its profit as seed money for growth and expansion.

More recently, Coupang’s founder Bom Kim is striving to expand its business in the Southeast Asian market to repeat its success in Korea of the same-day Rocket Delivery service.

The company is particularly interested in markets such as Taiwan, Singapore and Japan, according to industry officials.

Some analysts on Wall Street say Coupang is undervalued, with Bank of America Merrill Lynch and Goldman Sachs presenting Coupang’s target price at $55 and $61, respectively.

Coupang’s price-sales ratio, which hovered around a multiple of 2.5 when it went public on the NYSE, is currently below 2, similar to Amazon’s average PSR of 2.1 in years 2006-2007, when the US company’s prime service began to take off.

Write to Yun-Sang Ko at kys@hankyung.com
In-Soo Nam edited this article.