SoftBank-backed Coupang set to soar in market debut

SoftBank-backed Coupang set to soar in market debut

News: SoftBank-backed Coupang set to soar in market debut.

(Reuters) – Stocks of Coupang, South Korea’s largest e-commerce company, were set to open up to 43% above their asking price on Thursday after the company raised $ 4.6 billion in the largest initial public offering in the US this year.

At 10:13 a.m. ET, the stock was scheduled to open in a range between $ 45 and $ 50, giving the company a valuation of around $ 86 billion at the high end of the range.

Coupang said in a statement that 130 million shares sold in the IPO were valued at $ 35 per share, which is above the marketing range of $ 32 to $ 34 per share. The Seoul-based e-commerce giant, which is operated by the Japanese SoftBank Group Corp. a market value of $ 60 billion.

Founded in 2010 by Korean-American billionaire Bom Suk Kim, Coupang gained prominence after launching its guaranteed same or next day delivery service in the East Asian country. SoftBank’s $ 100 billion vision fund owns 35.1% of Coupang.

Reaching a valuation of $ 60 billion would add to good news for the Vision Fund, which is recovering from an annual loss in March. A record quarterly profit was announced last month.

Coupang operates an online marketplace that sells everything from fresh groceries to toys and the Coupang Eats grocery delivery app.

“We are concentrating on our home market with the laser,” said Kim in an interview. “We’ll be investing in 50,000 more jobs and billions of dollars more, not just in infrastructure, but in the unique end-to-end technology that powers them all.” of these services. “

In 2020, Coupang’s net sales increased 91% year over year to $ 11 billion. Net losses decreased to $ 567.6 million from $ 770.2 million a year ago.

Coupang’s successful stock offering comes because the U.S. IPO market has been the strongest in more than two decades, and investors are flocking to buy shares in tech companies that have benefited from the COVID-19 pandemic.

The IPO is the largest in the US this year, surpassing the $ 2.15 billion raised by the dating app Bumble Inc. This is also a jump in Coupang’s rating, which was set at $ 9 billion in a 2018 fundraising round, according to the Pitchbook.

Analysts in South Korea said the strong response to Coupang’s offering was the result of its market leadership in the country at a time when, like many other e-commerce companies, sales were rising due to the COVID-19 pandemic.

“Given the high level of valuation associated with pricing, the market is generous in assessing whether the company will achieve the top spot in market share,” said Park Sang-joon, analyst at Kiwoom Securities.

Coupang was the leading South Korean e-commerce company in 2020 with a 19.2% market share, according to Euromonitor, compared to 13.6% for Naver Corp and 12.8% for eBay Korea. It was the 10th largest e-commerce company in the world based on retail value excluding sales tax.

The company’s stock will trade on Thursday under the symbol “CPNG” on the New York Stock Exchange.

Goldman Sachs, Allen & Co, JPMorgan and Citigroup are the primary insurers for the offering.

Reporting by Chibuike Oguh and Krystal Hu in New York, Joshua Franklin in Boston, Joyce Lee, Heekyong Yang in Seoul and Scott Murdoch in Hong Kong; Letter from Sumeet Chatterjee; Editing by Aurora Ellis, Stephen Coates, Gerry Doyle, and Sriraj Kalluvila

Original Source © Reuters

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