Coupang market cap of 50 trillion won out… Kim Bum-seok secures 29 times differential voting rights

Input 2021.02.14 12:36

“‘How did we ever live without Coupang?’ I will create a world where consumers have these questions.”

On the 12th (local time), Coupang submitted a listing report of’S-1′ with this motto to the US Securities and Exchange Commission (SEC). This made Coupang officially listed on the US stock market. Coupang plans to list Class A common stock on the New York Stock Exchange (NYSE) under the’CPNG’ code. The number of common stocks to be listed and the range of the offering price have not been determined yet, but the total amount of financing is known to be $1 billion (about 1.1 trillion won). The financial investment industry predicts that the listing will be completed as early as next month.

The listing reflects the will of Coupang Chairman Kim Bum-seok. Chairman Kim said that in August 2011, the first anniversary of Coupang’s founding, “I will leap to the world by listing on NASDAQ within two years.” Coupang initially promoted listing on the NASDAQ, but went through the listing process on NYSE, the world’s largest stock exchange. This is the first time a Korean company has been listed directly on NYSE.

Coupang has recruited foreign executives one after another, including Kevin Wash, a former Fed director, who was mentioned as a candidate for the chairman of the U.S. Federal Reserve in 2019. At this time, there were constant rumors in the domestic distribution industry that Coupang was preparing to be listed on the US stock market.

In the industry, the background of Coupang’s choice of direct listing on NYSE is securing stable investment funds. Coupang has so far attracted $3.4 billion (approximately 3.76 trillion won) of investment from SoftBank’s Vision Fund, but additional investment including the Vision Fund has been cut off since 2018. Softbank Chairman Son Jeong-eui announced the return of investment (exit) in the third quarter of last year.

Coupang’s corporate value is expected to be between 30 and 50 trillion won. Bloomberg News reported that it is expected to have an enterprise value of more than $30 billion (about 3,210 trillion won), and the Wall Street Journal (WSJ) and the Financial Times (FT) are expected to exceed $50 billion (about 55.35 trillion won). Inside Coupang, it is known that more than 40 billion dollars (about 44.28 trillion won) is expected.

Funding is expected to go smoothly. This is due to the bright prospects of Coupang’s earnings disclosed in this listing report. Last year, Coupang’s sales amounted to 1,19667 billion dollars (about 13.25 trillion won), an increase of 85.2% from 7,153 trillion won in 2019. This is a performance that exceeds the market forecast. Samsung Securities predicted that Coupang posted sales of 11 trillion won last year.

The operating deficit, which is regarded as Coupang’s ambush, is also improving. Last year’s operating deficit was $527.7 million (about 580 billion won), down from $64383 million in 2019 (about 78.2 billion won). In the listing report, Coupang said, “The cumulative deficit by 2019 was $35.6 billion (about KRW 3.95 trillion),” and “We will continue to expand our customer base and expand our marketing channels.”

◇ Chairman Kim Bum-seok guarantees 29 times differential voting rights…Total 100 billion won shares paid to Coupangman

During the listing process, Coupang granted Class B common stock rights to the shares held by Chairman Kim. It is a stock with 29 times more voting rights than Class A common stock issued to ordinary investors. After listing, Chairman Kim can exercise voting rights equivalent to 58% of the shareholders’ meeting at the general shareholders’ meeting even if he has only 2% of the stake, thus maintaining practical management rights. However, if Chairman Kim sells, donates, or inherits this stock, such differential voting rights will be invalidated.

Founders of major global tech companies such as Google, Airbnb, and Snap also received 10 to 20 times the differential voting rights per share when listed in a similar manner. In Korea, the differential voting rights that exercise multiple voting rights per share are not guaranteed. For this reason, the reason for Coupang’s choice of listing on the US stock market is the lack of management control system.

Coupang announced in a listing report that it plans to pay up to 100 billion won in treasury stock to non-manager level employees as well as’Coupangman’, its delivery driver. Currently, the number of Coupang employees is about 50,000. Considering this, Coupang is expected to pay 2 million won worth of shares per employee.

However, Coupang is passive in its dividend policy for shareholders. In the listing report, Coupang said, “Coupang plans to secure available funds and future profits to finance business expansion.”

On the other hand, according to the listing report, Chairman Kim received a total of $14,434,1229, including $1,653 million in annual salary last year, and a total of $13,271 million (about $1.67 billion) in stock form bonuses. ) Was paid. Tuan Pam, the Chief Technology Officer (CTO), who was hired last year, received a total of $27.46 million (about 30,098 million won), including a bonus in the form of a stock equivalent to $27438,000 (about 3,373 billion won).