Bum-seok Kim, Chairman of Coupang’s board of directors, smiles ahead of the company’s listing in front of the New York Stock Exchange (NYSE) on the 11th (local time). The stock price of Coupang closed at $49.25, a 40.71% increase from the public offering price ($35 per share). /NYSE provided
On the 11th (local time), Coupang Chairman of the Board of Directors Kim Bum-seok (pictured) announced that he would reinvest 5 trillion won worth of funds secured through listing on the New York Stock Exchange in the United States. In addition to large-scale financing, the differential voting rights were also one of the backgrounds for choosing to go to the US instead of Korea.
In a video conference with Korean correspondents in New York, Chairman Kim revealed the background of the listing, saying, “I wanted to show that Korean unicorn companies (unlisted startups with an enterprise value of 1 trillion won or more) are also competitive on the stage where world-class companies compete.” He said, “The main purpose was to attract investment funds, but the availability of differential voting rights (to the US) also had an impact.”
Differential voting rights are a system in which more voting rights are given to managers’ stocks to protect management rights. Unlike major countries such as the United States, Japan, and China, Korea has not introduced it. Chairman Kim owns 100% of Class B, which has 29 times more voting rights than general stocks (Class A), giving him 76.7% of the voting rights.
Chairman Kim emphasized, “We will focus on strengthening our domestic position by expanding the nationwide distribution network with the funds raised this time.” It means that it will aggressively expand its share in the distribution market. Coupang’s domestic e-commerce market share last year was 13.0%, closely following Naver (16.6%).
He said, “Korea is the only large market that Amazon of the US and Alibaba of China, which dominate the global e-commerce market, have not been dominated,” he said.
On the same day, Coupang closed at $49.25 on the New York Stock Exchange, a 40.71% increase from the offering price ($35 per share). With a market capitalization of $8.85 billion (about KRW 10.57 trillion), it quickly jumped to the third largest domestic company after Samsung Electronics and SK Hynix.
Coupang raised $4.55 billion in funding through this IPO. Chairman Kim, 43 years old, was placed on the ranks of the rich. The valuation of his stock, which secured a 10.2% stake, is close to $9 billion based on the closing price of the day.
Interview with Chairman of the Board of Directors Kim Bum-seok
“I’m not interested in acquiring eBay and Yogiyo… Focus on planting Coupang’s own DNA”
Bum-seok Kim, Chairman of Coupang’s Board of Directors, seemed to be distancing from the recent ongoing joint venture in the domestic distribution industry. When asked if there are plans to acquire other delivery app companies such as eBay Korea and Yogiyo, “I cannot say that the door is closed about M&A, but it is better to have to be confident.” “I will focus on establishing the politics,” he emphasized.
In the distribution industry, prospects have been raised steadily that Coupang will take over competitors based on enormous listed funds. It is because it can achieve the’economy of scale’ effect while taking the No. 1 position in the e-commerce (e-commerce) market at once. However, Chairman Kim said, “In the case of M&A, you should not approach only from a business point of view, you must consider the cultural aspect,” and “in fact, it is not easy.”
Regarding the cumulative deficit problem, he expressed an opinion that “I think it was an investment, not a deficit.” At the same time, he raised his voice, saying, “We must continue investing aggressively and deliberately.” Coupang’s cumulative deficit as of the end of last year amounted to 4.67 trillion won. As a publicly traded company, the situation where deficits continue to accumulate is burdensome, so there have been observations that it will plan a profit-turning strategy to reduce investment and improve profitability, but it has been dismissed.
Chairman Kim said that Coupang employs more than 50,000 people, the third largest among domestic companies, but that it will hire an additional 50,000 people by 2025. This is because more bases are needed to build a dense nationwide same-day delivery network.
He said, “If we had made various decisions like a popular vote, there would have been no coupang or rocket delivery today. Like when it was a privately held company, we will remain faithful to our customers and devote ourselves to creating long-term value, and we will not care about short-term work forever.” Emphasized.
Chairman Kim explained that it benchmarked Amazon, but differentiated it with a service that is superior to Amazon. “Samsung Electronics was inspired by Sony in Japan, but thanks to its innovative DNA, it has surpassed Sony.”
When asked if he would like to enter the overseas market, Chairman Kim said, “I can’t say that I don’t have such a dream in the long term.” did.
In an interview with the US economic media CNBC this morning, Chairman Kim said, “The creativity of Koreans has led to the miracle of the Han River,” and “I am so excited to be a small part of an incredible story.” He added, “In 1960, Korea was one of the poorest countries in the world, with a per capita gross domestic product (GDP) of only 79 dollars, but now it has become the top 10 in the world.”
When asked if the rocket delivery service would be possible in other countries besides the densely populated Korea, he said, “Coupang has expanded its service to the whole country including rural areas as well as in densely populated cities.”
On this day, Coupang’s successful debut in the New York Stock Exchange was a huge hit for major shareholders, including Chairman Kim. Softbank, the largest shareholder with a 33.1% stake, has a valuation gain of more than 10 times the investment ($3 billion). Other major shareholders such as Venture Investment Company Greenox Capital (16.6%), Neil Meta Greenox Founder (16.6%), Chairman Kim (10.2%), Hedge Fund Maverick Holdings (6.4%), and Investment Company Rose Park Advisors (5.1%) The same is true.
Coupang executives and employees are also expected to make significant profits. As of the end of last year, stock options (right to purchase stocks) granted to employees amounted to 65.7 million shares. The average strike price for stock options is $1.95 per share. Even with a simple calculation, you can earn a margin of 20 to 30 times.
New York = Correspondent Jae-Gil Cho [email protected]