Sharp Drop in US Tech Stocks and Worker Deaths... Coupang IPO on the Test Bench

[Asia Economy New York=Correspondent Baek Jong-min] Coupang has encountered an unexpected obstacle ahead of its upcoming listing on the New York Stock Exchange (NYSE) this week. The Nasdaq market has plunged sharply, leading to a decline in the valuation of tech stocks, and concerns over the death of a delivery worker have emerged as a potential variable affecting the initial public offering (IPO).

[Image source=Yonhap News]

A major foreign media outlet reported on the 8th (local time) that the late-night delivery worker death incident occurring ahead of Coupang's scheduled listing on the 11th has cast a shadow over the IPO.

The foreign media stated that while this incident is unlikely to dampen the IPO investment enthusiasm, questions are being raised about Coupang's long-term growth potential.

The bigger negative factor is the sharp decline in tech stocks. Coupang strategically chose to list on the NYSE, but it cannot separate itself from the evaluation of the Nasdaq market or tech stocks. With the rapid rise in U.S. Treasury yields, the Nasdaq has fallen more than 10% from its peak. Amazon, the original model for Coupang, has also failed to recover, with its stock price falling below $3,000. The Wall Street Journal even described the Nasdaq as entering a correction phase.

Coincidentally, Coupang submitted its IPO documents to the U.S. Securities and Exchange Commission (SEC) on the 12th of last month, when the Nasdaq was at its peak. Although the recent IPO atmosphere has been to value even unprofitable companies highly if they have strong growth potential, under the changed market conditions, Coupang's valuation, which was mentioned to be as high as $30 billion earlier this year, soaring to $50 billion could become a burden.

Bloomberg also reported that Coupang's price-to-sales ratio (PSR) is 4.3 times, higher than Amazon's 3.9 times. Coupang's planned offering price is $27 to $30.

The stock performance of IPO companies has also been sluggish. Oscar Health, which raised $1.2 billion and listed on the NYSE on the 4th, has fallen from its $39 listing price to $31.

The presence of Roblox, a gaming company listing around the same time as Coupang, is also a concern. Roblox will begin trading immediately without a public offering process. The U.S. IPO industry and media unanimously expect Roblox's stock price to surge after the IPO.