Greenoaks Capital Partners disposes of about 50 million of Coupang's ordinary shares
Coupang founder Kim Bom poses after his company was listed on the New York Stock Exchange in March. Korea Times file
By Kim Jae-heun
Concerns are growing over possible follow-up exits of Coupang's investors after its second-largest shareholder, Greenoaks Capital Partners, disposed of about 50 million of the retailer's ordinary shares (ORDs).
It is the second-largest stock sell-off by the private equity firm after the safeguard deposit system was lifted for Coupang in August. Greenoaks pulled out 4.6 trillion won of its investment in August, September, November and December. The company referred to its large-scale sell-off of Coupang's stocks as “in-kind distribution” of its fund assets. It now holds 9.94 percent of Coupang's shares.
“Greenoaks Capital appears to have disposed of its shares to make a profit. There is also a possibility that Coupang's shares could be handed over to a third party at a discounted price through block deal trading over the counter,” an industry source said, Wednesday.
Industry officials say it is very plausible there will be more exits of Coupang's investors after the Greenoaks sell-off.
Right after Coupang's listing on the New York Stock Exchange in March, the online retailer's stock price was traded at $63.50, which is 40 percent higher than the initial public offering price of $35. In the last three months, Coupang's stock price has dropped to between the mid-$20 range to the early-$30 range. The retailer's closing price was $29.52 as of Dec. 28.
The central point is that no clear momentum is in sight for a stock rebound, leading to individual investors also selling off their Coupang shares, both here and aboard.
Coupang's sales in the third quarter of this year reached $4.6 billion (5.2 trillion won), up by 48 percent year-on-year, but its operating loss also increased by 46 percent to show $315.1 million (373.8 billion won). Since its establishment in 2010, Coupang's losses have accumulated to 4.8 billion won as of last year.
Coupang's largest shareholder, SoftBank Vision Fund, also took $1.69 billion in profits after selling 57 million shares of the retailer on Sept. 14, which accounts for 10 percent of what it had invested. Vision Fund had said earlier in March that it would not pull its money out of Coupang due to expectations for its “potential growth” in the market, but then it carried out the share sale right after the deposit safeguard was lifted.
Nonetheless, Coupang said that it will continue to invest in increasing customer satisfaction, rather than improving the company's profitability.
It is continuing to construct a nationwide network of fulfillment centers, which are distribution warehouses that play a key role in the rapid delivery of online orders. Last month, Coupang borrowed $308 million from a local bank by putting up real estate holdings as collateral. The online retailer promised to invest a total of 1 trillion won ($842.8 million) to open logistics centers nationwide including in Busan, North Jeolla Province, South Gyeongsang Province and North Chungcheong Province.
Currently Coupang has over 100 facilities in 30 cities here, which is by far the largest number owned by an individual retailer. Still, it wants more to provide delivery fees cheaper than its competitors', such as Shinsegae and Naver.
Securities firms have lowered their expectations for Coupang's stock price improvement.
Mizuho Securities set the online retailer's stock value at $50 in early April, shortly after Coupang went public, but it readjusted the price to $32 in November. JP Morgan also reset its prediction recently from $48 to $28.