[줌인]Alibaba debut… Why Kim Bum-seok chose to list in the US, not in Korea

[이데일리 함지현 기자]With Coupang Chairman of the Board of Directors Kim Beom-seok entering the procedure for listing on the New York Stock Exchange in the United States, attention is drawn to the background of promoting listing on the US stock market.

The reasons are high valuation and global competition, and some interpret it as whether Ma-Win’s move, which saw’fun’ with the listing of Alibaba’s NASDAQ, had an impact.

Bum-seok Kim, Chairman of Coupang’s Board of Directors (Photo = Coupang)

According to industry sources on the 14th, Coupang submitted a report to the US Securities and Exchange Commission (SEC) in accordance with the S-1 form for listing of Class A common stock (hereinafter referred to as common stock). The number of common shares to be listed and the range of the offering price are still undecided. Coupang plans to list its common stock on the New York Stock Exchange (NYSE) under the’CPNG’ ticker code.

Coupang’s listing in the United States had already been predicted. Chairman Kim expressed his will to list directly on the NASDAQ in 2011. With a cumulative deficit of 4 trillion won, domestic value evaluation is inevitably conservative, but the reason is that NYSE is open to companies with good technology such as Google, Amazon and Tesla.

Moreover, as it is the world’s largest market in which big companies are competing, it is highly likely to be advantageous for large-scale financing in the future.

There is also an interpretation that differential voting rights, which do not apply to the domestic market, are the factor. It is interpreted that it has challenged the US market to secure differential voting rights to maintain the right to operate the company while attracting large investments.

Differential voting rights mean different voting rights per share. Coupang’s common stock held by Chairman Kim is Class B, which is known to have 29 votes per share, unlike Class A, which has one vote per share.

Some say that Coupang’s decision is reminiscent of Chairman Ma’s move, who made Alibaba listed on the New York market using past technology.

When Alibaba entered the New York Stock Market in 2014, it was evaluated for its corporate value of 168 billion dollars (185 trillion won). Ma Yun, a former English lecturer and tour guide, made him one of the richest people in the world.

Starting with 17 people, Ma-win made a successful debut on the New York Stock Exchange after shaking the e-commerce industry with only one technology. Coupang is also offering differentiated services based on logistics innovation, so it is expected that the value of technology will be properly evaluated rather than a deficit through listing on the US stock market.

In fact, it is estimated that after Coupang’s listing, the enterprise value will reach 27.1 billion dollars (30 trillion won). From the analysis that it will be around $24.4 billion (27 trillion won) due to the accumulated deficit of Coupang, forecasts are raised that it will reach $50 billion (55 trillion won), which is higher than expected.

Bum-seok Kim (right) Chairman of Coupang and Chairman Son Jeong-eui of SoftBank Group are taking a commemorative photo after signing an investment contract at SoftBank Group headquarters in Tokyo, Japan in November 2018 (Photo Credit=Coupang)

Ma and Chairman Kim have the same thing as the investor Jeong-eun Son, chairman of the Japanese Softbank Group.

The anecdote of Ma Win’s return to Son’s heart after ‘6 minutes of negotiations’ in 2000 is famous. Ma Yun explained Alibaba’s vision of the growth potential of the Chinese e-commerce market, and Chairman Son decided to invest in six minutes. At the time, Chairman Son offered an investment of 50 million dollars, but Ma Yun realistically presented 20 million dollars in reverse, building trust. Since then, Chairman Son is known to have increased the scale of investment to 100 million dollars.

Coupang also received an investment of 2.7 billion dollars (3 trillion won) from Softbank and Softbank Vision Fund, which is closely related to Chairman Son. Based on this, it has achieved logistics innovation and has grown into an innovative company that attracts attention. In addition, it is expanding its scope to various fields such as full-filment service, food delivery service Coupangitsu, and real-time video streaming service Coupangplay.

The biggest beneficiary of the Coupang listing will again be SoftBank led by Son. Softbank Vision Fund owns a 38% stake in Coupang. If Coupang’s corporate value reaches $50 billion, SoftBank’s stake in Coupang is expected to reach $19 billion (21 trillion won). Chairman Son, who gained 60 trillion won worth of shares at the time of listing on Alibaba, made up to 7 times more profits from this coupang listing.

An industry insider said, “Coupang seems to have challenged the world’s largest market to be recognized for its ability while competing with Amazon and Alibaba,” and said, “Coupang is also receiving great attention from the market like Chairman Ma Win, who successfully debuted in the stock market.” .

It is known that Coupang selects Goldman Sachs as the listing organizer and conducts a corporate briefing (IR). The listing promotion target is expected to be Coupang LCC (a US corporation), a parent company that has a 100% stake in Coupang. Coupang announced that it plans to compensate front-line employees and unmanaged employees with a total amount of up to 100 billion won through a listing application filed with the US Securities and Exchange Commission. It also promised to create 50,000 new jobs by 2025.