Coupang share price volatile following blockbuster IPO

‘How did we ever live without Coupang?’

Better than Amazon?

To say that expectations for Coupang – the now $83 billion e-commerce giant – are elevated, may be understating it somewhat.

‘Coupang Is the Amazon.com of South Korea, but Maybe Even Better,’ wrote Eric J. Savitz from Barron’s.

A lofty comparison given Amazon’s relentless innovation, profitability and staying power. Not to mention its status as one of the world’s most valuable publicly listed companies.

Coupang’s also been attached to a number of high-profile investors, including Bill Ackman and Stanley Druckenmiller.

Masayoshi Son's SoftBank has made significant paper profits on their investment in the e-commerce player. SoftBank owns a 35% stake in the company, according to Bloomberg.

And to be fair, as the company notes in its own prospectus, it is already the largest e-commerce player in Korea.

Coupang share price: A volatile two sessions

Coupang saw its share price surge over 40% on its first day as a public company, finishing out last Thursday's session at $49.25 per share. The company had an IPO price of $35 per share.

In just two sessions, Coupang has already experienced significant levels of volatility. After trading as high as $69.00 per share, before hitting a low of $46.25 per shares.

Coupang last traded at $48.47 – implying a market capitalisation of $83 billion.

Coupang IPO: The Fundamentals

‘We are building the future of commerce.’

Despite already having a commanding presence in Korea, Coupang has its eyes set on the future.

‘While we have achieved significant scale, Coupang remains a small percentage of the total retail, grocery, consumer foodservice, and travel spend in the Korean market.’

The company estimates that the total value of those markets is expected to hit $534 billion by 2024; of which, e-commerce is expected to make up $206 billion of that estimate.

Indeed, Coupang already operates at a significant scale, reporting revenues of approximately $12.0 billion in 2020, representing a 90.8% increase on the year prior. Gross profits grew in step, rising 92.3% to hit $2.0 billion.

And the company's operating loss even tightened in the last year, coming in at negative $0.5 billion, opposed to a loss of $0.6 billion in 2019.

Looking forward, the company's CEO, Bom Suk Kim said:

'We are still far from realising the world we envision. We remain as energised as ever to transform the lives of every customer, employee, and merchant we touch, and to create a world where everyone wonders: How did we ever live without Coupang?'

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