[ad_1]
Bloomberg
Coupang’s $ 3.6 billion IPO shows US king of tech IPOs
(Bloomberg) – The initial public offering of South Korean e-commerce giant Coupang Inc. is set to become the highest listing of a Korean company in a decade. And, like most major tech offerings these days, it’s happening in New York City.There are three big reasons why the US is a better choice for SoftBank Group Corp’s Masayoshi Son-backed online retailer. . Perhaps more importantly, New York offers a hefty valuation premium. It also has a deeper, more liquid market and allows unequal voting rights that would benefit Coupang founder, Harvard Business School dropout Bom Kim. The United States has been the prime destination for IPOs. of mega-tech, with 2020’s biggest debuts Airbnb Inc. and DoorDash Inc., both listed in New York. Chinese e-commerce giants such as Alibaba Group Holding Ltd. and JD.com Inc. also became public there. Coupang is looking to raise up to $ 3.6 billion on its IPO and could rake in more than $ 50 billion worth. That would make it the biggest float for a Korean company since the Samsung Group floated its insurance unit on the stock exchange at home in 2010. – Coupang could have reached a peak valuation of just $ 10 billion, according to Suh YongGu, professor of marketing at Sookmyung University. “The history of capitalism in South Korea is short, so Koreans don’t assign high valuations to loss-making companies,” Suh said. The South Korean stock market is less than 70 years old and dominated by chaebols, or family-controlled industrial groups. In fact, SK Bioscience Co., a unit of SK Group, one of the county’s largest chaebols, will be the last to have a public presence when it goes public this month. The maker of AstraZeneca Plc’s Covid-19 vaccine for Korea is seeking to raise $ 1.3 billion ahead of its March 18 listing, according to the Seoul Economic Daily on Monday in Korean. be tested in the coming months with the IPOs of Krafton Inc., the creator of the hit game PUBG, and the country’s largest exclusively mobile bank, Kakao Bank. Unlike Coupang, these companies are profitable, which has lost money over the past three years, recording an accumulated deficit of $ 4.12 billion in December, according to its file. However, thanks to the surge in online shopping during the pandemic, it managed to almost double its revenue to $ 12 billion last year. A valuation of $ 51 billion would place Coupang among Korea’s five most valuable companies, of which Samsung Electronics Co. is the largest. The other large Korean startups with growing influence in e-commerce – the $ 58 billion internet conglomerate Naver Corp. and the $ 39 billion messaging app Kakao Corp. – are both listed in Seoul, but were both profitable when they went public. Both are backed by entrepreneurs and unrelated to chaebols like Samsung Group, in fact Coupang’s listing in the US will allow it to exceed the combined market value of the six chaebol-owned retailers trying to expand their presence in the United States. e-commerce – – E-Mart Inc., Lotte Shopping Co., GS Retail Co., Shinsegae Inc., BGF Retail Co., and Hyundai Department Store Co. share sales. According to Bloomberg data, the Korean stock market, with a total value of $ 2.12 trillion, is only a fraction of the US $ 44.2 trillion, according to Bloomberg data. “It is easier for investors to exit” from their holdings in the United States, said Seo Sang-Young, an analyst. at Kiwoom Securities in Seoul. “And the volume of transactions is much higher.” Finally, an American listing gives more power to the founders. Korea does not allow unequal voting rights, favored by tech companies like Alphabet Inc. and Facebook Inc., who see it as a foundational way to focus on the long term. But the United States does, although the ownership structure itself is not without controversy, as it lacks shareholder protection. Kim, the 42-year-old founder of Coupang, will end up with 76.7% of the company’s voting rights with only 10.2% of its shares outstanding. “We would have liked Coupang to be listed in Korea,” said Kim Sung-gon, spokesperson for the Korea Stock Exchange. “But we respect the choice of society.” Korea’s IPO boom year kicks off with Coupang FloatStill, missing opportunity to buy one of the country’s hottest companies as part of Asia’s largest company IPO since $ 25 billion of Alibaba Group Holding Ltd. York’s 2014 listing ranks retail investors who have dominated the Korean stock market since the spread of the pandemic. “Retail investors certainly regret that they can’t join the IPO,” said Kim DongJoo, CEO of Iruda Discretionary Investment, a Seoul-based investment firm for retail investors looking to buy. The biggest IPOs of Korean companies: Coupang prides itself on its same-day or at least before dawn deliveries. It also gives its warehouse staff and 15,000 full-time delivery people a total of $ 90 million in stock before the IPO, a unique largesse that comes at a time when the death of a chain of couriers due to overwork as online orders have skyrocketed is causing a “We believe we are the first company in Korea to make our frontline employees shareholders,” Kim said in a letter to shareholders when filing the Coupang’s IPO application. Five employees at Coupang warehouses died last year, according to Korea’s Confederation of Trade Unions, a major labor organization. A Coupang delivery driver was found dead on Saturday in an incident that Yonhap News said showed symptoms his colleagues attributed to overwork. Coupang said in a statement Monday that the deceased worker had “worked about four days a week on average and around 40 years old. hours in the past 12 weeks. He added, however, that he would “make efforts to fully protect the health and safety of workers.” (Updates with Coupang’s statement on recent worker death in last two paragraphs) For more articles like this, please visit us at Bloomberg. Subscribe now to stay ahead with the most trusted source of business news. © 2021 Bloomberg LP
Source link
