Bloomberg
SoftBank-Backed Coupang Gains After 2021’s Biggest U.S. IPO
(Bloomberg) — South Korean e-commerce giant Coupang Inc. delivered the biggest U.S. initial public offering since Uber Technologies Inc.’s and then rose to — briefly — become a $100 billion company in its trading debut.Coupang, whose biggest backer is Japanese conglomerate SoftBank Group Corp., opened trading in New York Thursday at $63.50 a share, an 81% jump from the price in its upsized $4.6 billion IPO Wednesday. The shares slipped from there but were up 55% to $53:81 at 2:52 p.m., giving it a market value of about $92 billion.The offering by Coupang further accelerated the pace of IPOs on U.S. exchanges this year, elevating the total raised to more than $114 billion, compared with $180 billion in all of last year, itself a record, according to data compiled by Bloomberg.Uber, which raised $8.1 billion in its 2019 IPO, has a market value of $109 billion. Coupang’s IPO was also the biggest by any Asia-based company in New York since Alibaba Group Holding Ltd.’s $25 billion listing in 2014, the biggest ever in the U.S.Coupang and its investors sold 130 million shares for $35 each in the IPO, after marketing them for $32 to $34 apiece. Late in the process, the selling stockholders increased the shares they were selling to 30 million from 20 million. The previous price range had been boosted from $27 to $30 earlier.In an unusual move, Coupang restricted access to its IPO to fewer than 100 investors, according to people familiar with the matter. The top 25 investors were allocated about 80% of the deal, the people said.“We were fortunate to have demand from a lot of great investors and we didn’t have room for all of the great investors out there,” Coupang’s founder and chief executive officer, Bom Kim, said in an interview Thursday. “I think we’re going to be going forward now with a wonderful group of investors, new investors as well, who share that long term vision and strategy.”Lockup ExceptionsCoupang’s IPO also includes exceptions to the typical lockup period barring employees and previous investors from selling shares for six months or more.While Coupang’s investors have agreed to a 180-day lock-up, that period is essentially shortened by the exceptions the company provided. Some employees can begin selling shares as soon as six days after the IPO as long as the company trades above its IPO price. Existing investors that are registered can sell a portion of their holdings in 12 days, providing the stock trades up at least 133% from the offer price of $35.SoftBank’s stake in Coupang is now worth about $30 billion. In November 2018, SoftBank’s Vision Fund invested $2 billion in the company in a deal that valued Coupang at $9 billion, people familiar with the matter said at the time. That funding followed $1 billion from SoftBank itself in 2015, valuing the startup at about $5 billion.Voting ControlFounded in 2010 by Kim, a Harvard University dropout, Coupang has grown into Korea’s version of Amazon.com Inc. Kim will continue to control the company because of the dual share structure that gives him about 77% of the voting rights, according to the company’s filings.The company has aggressively expanded its delivery and logistics operations, putting 70% of the country’s population within a seven-mile radius of its distribution centers, according to its prospectus filing. Coupang has also invested in new business lines like food delivery and streaming services.Coupang has cut its losses by more than half as its revenue has more than tripled over the past three years, according to its filings. For 2020, Coupang had a net loss of $475 million on revenue of about $12 billion.Goldman Sachs Group Inc., Allen & Co. and JPMorgan Chase & Co. led the offering. Coupang’s shares are trading on the New York Stock Exchange under the symbol CPNG.(Updates with CEO’s comment in seventh paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2021 Bloomberg L.P.
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