"Coupang Hit by 'Personal Information Leak': Morgan Stanley and T. Rowe Price Sold"

Institutional Ownership Stays in the 80% Range
No Major Exits, But Diverging Views Emerge
Foreign Brokerages Lower Target Prices

Despite the recent "personal information leak incident," Coupang Inc., the New York Stock Exchange-listed parent company of Coupang, has maintained its institutional investor ownership ratio in the 80% range. Although some major shareholders reduced their stakes toward the end of last year, some investors were found to have increased their holdings.

According to the institutional investor holdings disclosed by Nasdaq on the 25th, as of the end of the fourth quarter of last year (December 31), institutional investors owned 84.16% of Coupang’s shares. The 795 institutions together held about 1.4 billion shares. At the end of the previous quarter, the third quarter (September 30), institutional ownership stood at about 80.5%. The data are based on 13F reports that institutional investors file with the U.S. Securities and Exchange Commission (SEC) each quarter.

The views of the top 10 institutional shareholders on Coupang diverged. Morgan Stanley sold more than 9.23 million shares, cutting its holdings by 14% from the previous level, and T. Rowe Price also sold about 14.99 million shares, reducing its stake by 24%. FMR, the parent company of Fidelity Investments, likewise sold more than 9.21 million shares, trimming its holdings by 26%.

Selling related to portfolio rebalancing was also observed. Baillie Gifford, the UK asset manager that is the second-largest shareholder after SoftBank, sold 4.26 million shares, reducing its stake by around 3%. However, when asked by The Asia Business Daily about the impact of the Coupang incident, the firm stated, "We do not comment on temporary share price volatility and issues, just as we did when the incident occurred," while adding, "An adjustment of this magnitude is for rebalancing purposes."

On the other hand, some institutions aggressively increased their stakes. Capital International Investors bought more than 6.98 million shares, boosting its holdings by 20%, while Tiger Global Management, a hedge fund specializing in growth stocks, purchased an additional 10.43 million shares, expanding its stake by 66% compared with before.

Among the five U.S. investment firms that recently filed legal objections against the Korean government over Coupang, strong buying was also notable at Foxhaven (6.5 million shares, up 61%) and Altimeter (5.65 million shares, up 56%). By contrast, Durable Capital Partners sold 380,000 shares, cutting its stake by about 2%, while Abrams Capital and Green Oaks made no changes to their holdings. These investors recently sent a notice of intent to the Korean government stating that they plan to initiate investor-state dispute settlement (ISDS) arbitration proceedings, claiming that the Korean government treated Coupang in a discriminatory manner in violation of the Korea-U.S. Free Trade Agreement (FTA), and that they suffered losses such as share price declines as a result.

In addition, Duquesne Family Office, the private investment firm owned by billionaire investor Stanley Druckenmiller, who has been described as the "behind-the-scenes economic power" in the Donald Trump administration, increased its Coupang holdings by 2.14 million shares (about 46%), bringing its total to more than 6.77 million shares. Goldman Sachs Group also expanded its holdings by about 55% from the previous level, bringing its stake to more than 5.5 million shares. During the quarter, 134 institutions fully exited their Coupang positions, while 106 institutions newly took positions.

However, as Coupang’s share price has continued to decline since the beginning of this year, the value of the same ownership stakes is believed to have fallen. From a closing price of 23.59 dollars on December 31 last year, the stock dropped more than 20% to 18.58 dollars on the 23rd of this month. The gap with the 52-week low of 16.74 dollars is also only around 2 dollars.

The direction of the share price now hinges on the fourth-quarter and full-year earnings, which are scheduled to be announced at 5:30 p.m. on the 26th (local time), or 7:30 a.m. on the 27th in Korea. Particular attention is being paid to what message Coupang Chairman Bom Kim will deliver during the conference call. On this day, according to investment information platform TipRanks, the current consensus target price (average of market forecasts) stands at 26.90 dollars.

Foreign securities firms have recently been lowering their target prices, saying that regulatory uncertainty and other factors are likely to weigh on the stock in the short term. Barclays on the 20th maintained its "overweight" rating but cut its target price from 40 dollars to 23 dollars. UBS likewise lowered its target from 35 dollars to 25 dollars on the 19th. Citigroup also recently reduced its target from 27 dollars to 24 dollars. JP Morgan, however, kept its existing target price of 33 dollars in a report released on the 19th.