Coupang Handpicked Few Investors to Buy Into Mega IPO

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Coupang Inc. handpicked fewer than 100 investors to participate in its $4.6 billion initial public offering, a rare move that shut out many potential shareholders from the year’s largest U.S. listing, people familiar with the matter said.

The South Korean e-commerce company allocated the top 25 investors about 80% of the deal, a higher proportion than most IPOs, according to the people. An unusually large amount of investors who put in orders weren’t allocated any stock, the people said, asking not to be identified because the information is private.

While companies typically want to pick funds that are likely to hold for the long term, they usually let in a broader range of investors. The concentrated nature of the deal illustrates how Coupang wanted to have greater control of its U.S. debut and how the market is red-hot for new technology offerings.

Shares of Coupang surged 63% in early trading Thursday to $57.03, valuing the company at $98 billion.

“We were fortunate to have demand from a lot of great investors and we didn’t have room for all of the great investors out there,” Coupang’s founder and chief executive officer, Bom Kim, said in an interview Thursday. “I think we’re going to be going forward now with a wonderful group of investors, new investors as well, who who share that long term vision and strategy.”

The company sold some of the shares to investors who were existing backers of the company, the people said. Coupang and its management played an outsized role in choosing which funds were let into the deal, according to the people. Goldman Sachs Group Inc. was lead arranger on the IPO.

“This is not true. We worked closely with our bankers on this,” a representative for Coupang said. A representative for Goldman Sachs declined to comment.

The retailer’s IPO is the biggest on a U.S. exchange since Uber Technologies Inc. raised $8.1 billion in 2019, according to data compiled by Bloomberg. Coupang’s offering is also the biggest by any Asian company in New York since Alibaba Group Holding Ltd.’s $25 billion listing in 2014, the biggest ever in the U.S.

©2021 Bloomberg L.P.

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