Coupang seeks New York listing with 2 classes of shares

Coupang is planning to list on the New York Stock Exchange (NYSE) in a $1-billion offering that could make it the largest foreign issuer in the United States since Alibaba.

Coupang headquarters in Songpa District, southern Seoul, on Saturday. [YONHAP]

Coupang is planning to list on the New York Stock Exchange (NYSE) in a $1-billion offering.

The company, which delivers goods and food to homes and businesses, has been loss-making since its founding in 2010 and has been facing cutthroat competition from money-is-no-object local e-commerce players and, in recent years, from the likes of Amazon.

It even struggled to make money during the pandemic despite a delivery boom due to lockdowns and work-at-home guidelines. In 2020, it managed to lose $474.9 million and now has an accumulated loss of over $4 billion.

While start-ups in the red have traditionally gone to the Nasdaq for listing, the NYSE listing rules allow companies with no record of income to go public on the board if they meet other benchmarks, such as those related to cash flow and revenue.

Coupang is aiming for a valuation of around $50 billion in its initial public offering (IPO), according to a report from Reuters.

Coupang’s plans were made public in an S-1 filing with the U.S. Securities and Exchange Commission (SEC). That document is a disclosure for companies hoping to list on a U.S. market.

In the document, the company said that Goldman Sachs, J.P. Morgan and Citigroup are on the list of underwriters of the offering and that it plans to trade in New York using the ticker symbol CPNG.

In the S-1, Coupang wrote that it is currently a Delaware-registered limited liability company and will become a Delaware corporation once the paperwork is cleared by the regulator.

No dividend will be paid when the company is public, according to the S-1.

Coupang also noted that it will list with a dual-class shareholding structure, with founder Kim Bom-suk receiving special Class B shares. Each B share gets 29 votes, while each A share will have one vote.

In the S-1, the company warns that the dual-share structure could have corporate governance implications and discourage possible takeover attempts. It also warned that the structure could result in the exclusion of the stock from certain indexes, which some institutional investors use to guide their weighting decisions, and is unpopular with some stockholder advisory firms, which might seek to force a change.

“The dual-class structure of our common stock will have the effect of concentrating voting control with Bom Suk Kim,” Coupang wrote in its SEC filing. “This voting control will limit your ability to influence the outcome of important transactions and to influence corporate governance matters.”

The dual-class structure has been prohibited in Korea, but is possible for U.S. companies. Coupang declined to comment on the special class of shares.

Coupang’s years of losses were made possible through heavy investment from SoftBank, which poured $1 billion into Coupang in 2015, and Softbank’s Vision Fund, which invested an additional $2 billion in 2018. Coupang’s other investors include BlackRock, the world’s largest asset manager, and venture capital firm Sequoia Capital.

Coupang’s market share in online shopping is projected to inch up 2.5 percentage points this year to 15.8 percent, according to analyst Kim Myoung-joo from Mirae Asset Daewoo.

The company’s IPO filing arrived 10 years after Kim said “Coupang will go public on Nasdaq within two years and become a global leader” on the company’s first anniversary in August 2011.

Coupang is expected to list on the NYSE by April. It has yet to provide a target price for its shares.

BY JIN MIN-JI [jin.minji@joongang.co.kr]