Coupang IPO Dazzles Wall Street, Draws Comparisons to Amazon

April 5, 2021 James Heinsman Hedge Fund News

One week after South Korean e-commerce giant Coupang (CPNG) dazzled Wall Street with the largest U.S. IPO to date, Pershing Square Capital CEO Bill Ackman announced he would donate more than $1.3 billion worth of Coupang stock to charity.

With the stock launch underwritten by Goldman Sachs, Allen & Company, J.P. Morgan, Citi and HSBC, Coupang raised $4.6 billion on its first day of trading, leading to a 41 percent spike in the stock price. That led to a windfall for Ackman, who was an early supporter of the company.

“I was a very fortunate day one investor in Coupang. As a result of its incredible success, 26.5 [million] shares of its stock will benefit humanity as I gave all of the share to [the Pershing Square Foundation], a [donor-advised fund], and another non-profit. Thank you to Bom and the Coupang team on behalf of all of us!,” Ackman tweeted on Monday.

Since being founded in 2010 by Bom Kim, Coupang has grown steadily, closing out 2020 with $11.97 billion in revenue. Driven by Asia’s number 4 economy, with $1.6 trillion GDP, or about $31,847.15 per capita, according to Yahoo!Finance. The website said that per-buyer spending is expected to jump from $2,600 in 2019 to $4,300 in 2024, with some 70% of South Korea’s population located within seven miles of a Coupang logistics center.

If there is a cloud hanging over Coupang, which has been dubbed “Korea’s Amazon,” it is the fact that the company continues to sustain large annual losses – $770.2 million in 2019 and 567.6 in 2020.

That fact doesn’t seem to intimidate investors, however. Nirgunan Tiruchelvam, head of Dubai-based Consumer Sector Equity Research, describes the company as a “great value.”

Coupang is superior to any of its peers. It delivers its goods through a “Rocket Delivery” program that enables it to deliver goods within 24 hours – and some within 7 hours. It has eclipsed Amazon as the main e-commerce operator in South Korea, and now serves 15mn customers, representing a third of the total population, he wrote on the Tellimer finance news portal.

Bill Ackman Pershing Square, Bom Kim, Coupang, Korea, Pershing Square,

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