South Korean eCommerce giant Coupang ended its first day of trading at $49.25, up $14.25 on the day, or 40.7 percent.
It’s not a bad haul for a first day of trading, and it could be further evidence that eCommerce is here to stay.
The target range had been $32 to $34 a share, CNBC reported. The offering price was $35, and the shares opened right out of the gate at $63.50.
Now, observers can read this single-day showing in one of two ways. If the shares opened in the high $50s and finished in the high $40s, then the debut was lackluster. Or the big leap from the stated offering price was a show of enthusiasm.
Initial public offerings (IPOs) have been hot pretty much anywhere you look. And although a rising tide may lift all boats, some waves are more buoyant than others.
As relayed by Bloomberg Thursday (March 11), the offering has been the biggest one since Uber debuted in 2019, and for a bit on Thursday, Coupang had a market cap that hit $100 billion (SoftBank’s stake is worth about $30 billion) before backing off. At a high level, IPOs in general have taken in $114 billion this year — and for comparison’s sake, consider the fact that in all of last year, IPOs raised $180 billion. In a bit of detail, Coupang limited participation in the IPO to fewer than 100 investors — and the top 25 investors got 80 percent of the shares on offer.
Digital Shift Sea Change
Coupang has been riding the sea change of the digital shift, where we do pretty much everything from devices.
As PYMNTS has reported, the tailwind to an eCommerce firm’s top line (and by extension its operating line’s momentum) can be significant.
Coupang’s S-1 filing with the Securities and Exchange Commission (SEC) reveals that from the beginning of 2018 through the end of the most recent year, quarterly revenues soared by a multiple of four times, from the U.S. dollar equivalent of about $900 million to $3.8 billion. Operating losses along the same timeframe declined to $527 million from more than $1 billion.
As one might expect from an eCommerce giant, same-day delivery is critical. Coupang has noted that items ordered as late as midnight will arrive by 7 a.m. the next day, PYMNTS reported. Elsewhere, customers are eligible for free one-day delivery, every day, everywhere.
The company stated that it has built the largest B2C footprint in the nation, with 100 fulfillment and logistics centers in more than 30 cities, totaling more than 25 million square feet. As for last-mile efforts, the company directly employed more than 15,000 delivery drivers as of the end of last year.
Now, one day of trading does not a trend make. And nothing travels in a straight line — certainly not stock prices. But an auspicious debut is an auspicious debut.