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Why Coupang Stock Soared Today | The Motley Fool

What happened

Shares of Coupang (NYSE:CPNG) rocketed over 40% on Thursday, marking a successful initial public offering (IPO) for the South Korean e-commerce star.

So what

Coupang’s shares closed their first day of trading at $49.25. That’s up from the company’s $35 IPO price, which was already up significantly from its initial target range of $27 to $30.

Investors jumped at the chance to buy Coupang’s shares upon their stock-market debut. Image source: Getty Images.

Like Amazon (NASDAQ:AMZN), Coupang has come to be loved by its customers for its broad selection of goods, low prices, fast delivery services, and excellent customer service. These competitive advantages have helped it capture a leading share of South Korea’s booming e-commerce market.

Now what

Coupang has some notable backers, including Japanese investment firm SoftBank Group and U.S. wealth management titan BlackRock. The funds provided by these early investors have helped Coupang build out its leading e-commerce fulfillment network, which is so efficient that it can offer customers its popular Dawn Delivery service. Shoppers can place orders for millions of items as late as midnight and receive them before 7 a.m.

The cash Coupang raised from its IPO should help it further strengthen its fulfillment capabilities. And it comes at the right time. Competition is intensifying in South Korea’s e-commerce industry, as more retailers are ramping up their online offerings.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.



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