Why Is Coupang (CPNG) Stock Down Today?


The bloodbath continues for investors in South Korean e-commerce juggernaut Coupang (NYSE:CPNG). Today, CPNG stock has dropped more than 20%, bringing the total decline from this company’s peak to approximately 75%.

A close-up shot of a Coupang (CPNG) delivery vehicle.
Source: Ki young / Shutterstock.com

Is this warranted? After all, many consider Coupang to be the “Amazon of South Korea.”

Its extensive e-commerce operations are truly noteworthy. Indeed, as a recent initial public offering (IPO), many investors piled into this stock, believing in its long-term growth story. The company came public with big backers like SoftBank (OTCMKTS:SFTBY) and promised to leverage a boom in online shopping.

However, this past year has not been favorable for many tech stocks. This pain extends to companies based in China and South Korea, where regulatory and geopolitical issues have weighed on sentiment.

With that said, let’s dive into what the market is watching with Coupang specifically today.

CPNG Stock Dives on Block Sale Reports

Today, reports of a massive block sale appear to be the key driver behind Coupang’s decline. Reportedly, a 50-million-share block is being shopped by Goldman Sachs. Typically, such large sales happen when institutional investors blow up, or are forced to liquidate their holdings due to margin calls. We saw some similar technical price action take place in a range of Chinese tech stocks following the high-profile demise of Archegos’ Bill Hwang last year.

Others may speculate that large investors may know something the market doesn’t. When such sales happen, this is certainly a bearish signal. Today, with the market looking for a reason to sell off, shares of Coupang are getting clobbered.

Accordingly, it’s up to the individual investor to decide whether this technical move lower is a buying opportunity, or evidence of higher risk. Right now, I don’t know what to make of this move. However, considering how far Coupang has fallen, I do think it’s likely that value investors may want to take a shot at this beaten-up stock at these levels.

On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.

Chris MacDonald’s love for investing led him to pursue an MBA in Finance and take on a number of management roles in corporate finance and venture capital over the past 15 years. His experience as a financial analyst in the past, coupled with his fervor for finding undervalued growth opportunities, contribute to his conservative, long-term investing perspective.

Article printed from InvestorPlace Media, https://investorplace.com/2022/03/why-is-coupang-cpng-stock-down-today/.

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