Coupang also bit a big hand on Wall Street… When will the ‘one-fifth’ stock rebound?
As Coupang’s stock price continues to decline, some US institutional investors are reported to be experiencing valuation losses of more than 1 trillion won. However, as Coupang continues to grow, some investors are betting on the possibility of a future rebound.
Coupang was listed on the New York Stock Exchange on March 11 last year at an offering price of $35. The stock price soared to $69 on the first day of listing, but then continued to decline, dropping to $13.63 on April 28. This is 40% of the public offering price, which is about a fifth of the highest price. The market cap, which once exceeded 100 trillion won, has also shrunk to 30 trillion won.
Major U.S. institutional investors who have invested in Coupang have been active in buying Coupang since the stock price of Coupang fell below the IPO price in the third quarter of last year. However, Coupang’s share price continued to decline as growth stocks adjusted in the US stock market and bad news such as the sale of the Vision Fund’s stake continued. Accordingly, the valuation loss of major investors, Capital International and Bailey Rigford, is estimated to exceed 1 trillion won.
There is also an opinion that Coupang’s stock price will rebound sooner or later. The reason is that growth is expected as it is expanding its influence in the Asian e-commerce market. The growth potential in the Korean market is also outstanding. Coupang’s share in the domestic online market, which was at 8.9% in 2019, is expected to increase to 20.1% this year and 24.9% in 2022. Its strength is that it is easy to add new services as it has its own delivery network and logistics warehouse. Expectations are high for new businesses such as Coupang Eats, a delivery application launched in 2019, and Coupang Play, an OTT service launched in 2020.
However, it is pointed out that, in order for the stock price to rebound, it is urgent to resolve the deterioration of profitability, such as the operating loss in the fourth quarter of last year, which was $39,700, and the deficit widened compared to the previous quarter. “Coupang is showing strong will to improve profitability this year,” said Nam Nam-hyeon, an analyst at Hanwha Investment & Securities. After the listing, the increase in investment and hiring manpower due to aggressive logistics center expansion, promotional events to expand the delivery service market share, and increase in content investment to expand OTT competitiveness are the causes of the loss. Whether or not you can do it is what matters.”
[ⓒ 매일경제 & mk.co.kr, 무단전재 및 재배포 금지]