Bloomberg
Coupang’s $ 3.6 Billion IPO Shows US Is King for Tech IPOs
(Bloomberg) – South Korean e-commerce giant Coupang Inc. has its first public offering. on track to become the largest listed by a Korean company in a decade. And, as with most major technical offerings these days, it ‘s happening in New York. There are three major reasons why the US is the better choice for the e-tailer backed by Masayoshi Son at SoftBank Group Corp. Perhaps in particular, New York offers a good valuation price. It also has a deeper, more liquid market, and allows for unequal voting rights that would benefit Coupang founder Harvard Business School Bom Kim. The U.S. has been the destination of choice for mega tech IPOs, with the biggest debates in Airbnb Inc. 2020. and DoorDash Inc. both listed in New York. Chinese e-commerce giants such as Alibaba Group Holding Ltd. and JD.com Inc. publicly there. Coupang is trying to raise up to $ 3.6 billion in its IPO and could raise more than $ 50 billion worth. That would be the largest launch by a Korean company since Samsung Group made its insurance unit public at home in 2010.Had the loss-making e-commerce company listed in Korea – which allows this month to allow non – profit companies to go public – – Coupang could have received a maximum valuation of just $ 10 billion, according to Suh YongGu, professor of marketing at Sookmyung University. “There is a history of capitalism. South Korea is short, so Koreans will not offer high valuations to loss-making companies, ”said Suh.South Korea’s stock market for less than 70 years, and is controlled by chaebols, or industry groups under family control. In fact, SK Bioscience Co., a unit of SK Group, one of the largest chaebols in the county, will be the latest to appear at the stock market when it goes public this month. AstraZeneca Plc is the Covid-19 vaccine maker for Korea, trying to raise $ 1.3 billion ahead of its listing on March 18, according to Seoul Economic Daily-language Monday. Korean investors ’desire for their indigenous startups will be entrepreneur-led, however. to be confirmed in the coming months by IPOs with Krafton Inc., creator of the hit game PUBG, and the country ‘s largest mobile bank, Kakao Bank. Unlike Coupang, these companies are profitable. Coupang has lost money in the past three years, recording a accumulated deficit of $ 4.12 billion since December, according to the filing. Thanks to the rise in online shopping during the pandemic, however, it managed to double its revenue to $ 12 billion last year. Coupang was valued at $ 51 billion among the five most valuable companies in Korea, and Samsung Electronics Co. most. The other big startups in Korea with a growing clout in e-commerce – the $ 58 billion internet conglomerate Naver Corp., and the $ 39 billion messaging app Kakao Corp. – both listed in Seoul, but both were profitable when they went public. Both are backed by entrepreneurs and are not affiliated with the chaebols like Samsung Group.In fact, a Coupang listing in the US will allow it to exceed the total market value of the six chaebol-owned retailers that are seeks to expand its presence in e-commerce – – E-Mart Inc., Lotte Shopping Co., GS Retail Co., Shinsegae Inc., BGF Retail Co., and Hyundai Department Store Co..Liquidity another deception of the U.S. market, allowing companies to raise money frequently through high selling shares. The Korean stock market, at a total value of $ 2.12 trillion, is a fraction of US $ 44.2 trillion, according to Bloomberg data. “It is easier for investors to leave their promises in the US,” said Seo Sang-Young, an analyst at Kiwoom Securities in Seoul. “And the trade volume is much greater.” And finally, listing in the U.S. gives more power to founders. Korea does not allow uneven voting rights, favored by tech companies like Alphabet Inc. and Facebook Inc., which sees it as a way for founders to focus on it in the long run. But the US does, even if the property structure itself is not without controversy, as there is no shareholder protection. Kim, 42-year-old Coupang founder, ends up with 76.7% of the company’s voting rights with just 10.2% of the outstanding shares. “We would like Coupang to be listed in Korea,” said Kim Sung-gon, a spokeswoman for the Korean stock exchange. “But we respect the company’s choice.” Korea IPO Boom Year kicks off with Coupang FloatStill, missing out on buying opportunity into one of the hottest companies in the country in the largest Asian company IPO from $ 25 billion New Alibaba Group Holding Ltd. The 2014 York listing ranks the retail investors who came to take control of the Korean stock market since the spread of the pandemic. ”There is certainly regret among retail investors that they cannot buy into the IPO, ”said Kim DongJoo, CEO of Iruda Discretionary Investment, a Seoul-based investment firm that caters to retail investors looking to buy foreign stocks.Largest IPOs with Korean Companies : Coupang is proud of the same day or at least advance deliveries. It also provides $ 90 million to warehouse staff and 15,000 full-time delivery workers in pre-IPO stock, a unique lark that comes at a time when strings of couriers are dying from work how online orders are on the rise is causing a national uproar. “We believe we are the first company in Korea to put our employees on the front line,” Kim said in a letter to shareholders in Coupang’s IPO filing. Coupang warehouse workers have died in the past year, according to the Korean. Trade Union Federation, a key working group. On Saturday, a Coupang delivery driver was found dead in an incident Yonhap News reported showing signs that his colleagues engaged in overwork. Oupoupang said in a statement on Monday that the deceased employee had “worked on average about four days a week and worked around 40 hours for the past 12 weeks.” However, he said he would “make every effort to safeguard the health and safety of workers.” (Updates with Coupang’s account of a recent employee’s death in the last two paragraphs) For more articles like this, visit us at bloomberg. comSubscribe now to stay ahead with the most trusted business news source © 2021 Bloomberg LP