There’s an exciting development that not too many traders are talking about yet. Namely, South Korean e-commerce company Coupang (NYSE:CPNG) filed for its initial public offering (IPO) on Feb. 12, 2021, and will trade as CPNG stock.
I’m typically not known for recommending that investors jump on an IPO stock. Usually, I would advise caution as IPO’s often represent untested and un-established companies, so there’s major risk involved.
I like Coupang’s prospects, but this is still an IPO so please don’t pour your entire brokerage account into it. For a moderately sized allocation, though, CPNG stock looks like a worthy investment.
So, if you’re willing to give a different region of the world a try, you might discover an investment opportunity that many traders don’t know about today, but will likely be talking about later on.
A Closer Look at the Coupang IPO
Generally speaking, U.S.-based retail traders haven’t been able to buy Coupang shares yet. They won’t have to wait much longer, however, as the IPO is set to take place on March 11.
The company expects to price its IPO between $27 and $30 per share. Moreover, around 120 million shares are expected to be offered during the IPO. So, Coupang could receive a capital infusion of up to $3.6 billion.
Coupang’s valuation was around $9 billion in 2018. Following the IPO, however, the company could be worth $46 to $51 billion.
If you’re starting to get the idea that this will be a game-changing IPO, you’re probably right. In fact, the Coupang IPO is expected to be the biggest listing by a Korean company in a decade.
Thus, while so many of today’s investors are focused on special purpose acquisition companies (SPAC’s), don’t ignore this good old-fashioned IPO as it’s bound to be a real headline grabber.
The South Korean Amazon?
If you missed the boat on the incredible multi-year run-up in Amazon (NASDAQ:AMZN) stock, you’re certainly not alone.
Plenty of investors wish that they had bought Amazon shares when they were much cheaper and held them until they hit $3,000.
Yet, maybe you can get a second chance to own a stake in a company on a similar trajectory.
Not everyone has an open mind towards international investments. To the doubters, I would recommend thinking outside of the geographic box.
Coupang might not be a familiar brand name in the U.S., but it could be considered the South Korean version of Amazon. There are just too many parallels to ignore here.
They’re both e-commerce companies that provide electronics, home goods, books, children’s toys and games, baby products and more.
Coupang even has a subscription program called Coupang Wow Rocket Membership, which is similar to Amazon Prime.
Buy CPNG Stock Sooner, or Later?
I expect that only a few American traders will take a position in this ground-floor opportunity in March or April.
That’s usually how it goes: people don’t hear about a great early-stage investment, so they miss out on the lion’s share of the gains.
Then, later on, they buy the shares at a much higher price. Let me propose this to you: why not buy a few CPNG stock shares this month, and then store them away and forget about them for a while?
Just let Coupang expand at its own pace – which is quite a fast pace actually, as the company has already rolled out its own video streaming service called Coupang Play as well as the Coupang Logistics network.
On top of all that, Coupang is entering into the grocery market and already claims to be the largest online grocer in Korea.
The Bottom Line
I truly believe that this is a rare ground-floor opportunity. And, I don’t say that very often.
Will CPNG stock grow in price like Amazon shares did? Only time will tell, but the potential for a multi-bagger is definitely there.
On the date of publication, David Moadel did not have (either directly or indirectly) any positions in the securities mentioned in this article.