The stock price plummeted 30% within one week of listing! Korean e-commerce Coupang has attracted widespread attention

It is reported that Coupang entered the New York Stock Exchange on the 11th. Its stock price fell by 30 % in a week , falling below the $50 mark . Except for a surge of more than 40% on the first day of listing , its stock price has been on a downward trend for several days .

It is understood that market vigilance has increased as Coupang Chairman Kim Bum-seok sold some shares the day before , and the protection deposits provided for executives and employees will be canceled a day in advance.

On the 16th (local time) , Coupang (CPNG Class A) shares closed at $47.13 on the New York Stock Exchange ( NYSE) , down 6.58% from the previous trading day . This is lower than the closing price of $49.25 on the first day of listing , and more than 30% lower than the highest point of $69.00, showing an unstable stock price trend.

According to the S-1 filing with the U.S. Securities and Exchange Commission ( SEC) , 34 million shares of stock options granted to all managers and employees on the 18th (65.7 million shares as of the end of last year) will have their protection advances lifted , which accounts for 4.8% of the total number of shares ( 69.81 million shares).

The protection of prepayments is a system that forces shareholders or cadres and employees who own more shares to not sell their shares within a certain period of time after listing. Therefore, Coupang’s major shareholders and other shareholders cannot sell their shares within 180 days , but ordinary employees can sell their shares 6 days after listing if the stock price is higher than the public offering price ($35).

Earlier, Coupang founder Kim also sold 1.2 million Class A shares (old shares) he owned at $35 per share (public offering price), totaling $42 million (about 47.5 billion won). In other words , the ironic situation of the stock price falling was fueled by the lifting of the "protection advance" for executives and employees .

Kim Myung-ju, a researcher at Mirae Asset Daewoo, explained: "Growth potential and market share in the distribution market may increase, but there is also a burden on the short-term value strategy (performance compared to stock price) if the price-to-sales ratio (PSR) rises more than 3 times."

In fact, Coupang’s current company value is approximately US$89 billion. Through aggressive expansion, Coupang has won a considerable market share and may become the next Amazon.

South Korea

Coupang

Stocks fall