Coupang headquarters in Seoul (Im Se-jun/The Korea Herald) Coupang Inc. shares surged after South Korea’s privacy regulator imposed a record fine on the US-listed e-commerce giant over a massive customer-data leak, with investors reading the penalty as a coda to a six-month overhang on the stock.
Shares of Coupang closed at $17.25 on Friday, up 14.1 percent from the previous day on the New York Stock Exchange, marking one of the company’s strongest single-day gains in recent months. The rally came despite the Personal Information Protection Commission’s decision to levy a 624.7 billion won ($409 million) penalty, the largest privacy-related fine ever imposed by a Korean government agency.
The rally laid bare the extent to which investors had been preparing for the worst, with Coupang shares having fallen from roughly $27 in late December to as low as $15 earlier this month, just above their 52-week low of $14.92.
Investors had braced for a fine exceeding 1 trillion won, the maximum allowed under rules capping penalties at 3 percent of a company’s average revenue over the prior three years. But regulators excluded revenue from businesses unrelated to the violations, bringing the penalty to roughly 1.2 percent of applicable sales. Coupang posted $34.5 billion in sales and $473 million in operating profit last year.
Morgan Stanley said in a note that the final fine was broadly in line with market expectations of around $400 million, adding that the ruling removes a major source of uncertainty for the shares. The bank kept its “Overweight” rating and $28 price target on Coupang.
According to some industry officials, attention now turns to the company’s longer-term growth story, including its logistics build-out and international expansion.
For its part, Coupang has pushed back against key elements of the regulator’s findings and plans to challenge the ruling in court.
“The PIPC’s regulatory findings and penalties are subject to judicial review,” the company said in an 8-K filing with the US Securities and Exchange Commission. “Coupang Corp. will vigorously pursue judicial relief in the Seoul Administrative Court.”
As the case has become a flash point in Korea-US relations, Korean officials said they would brief US authorities on the ruling amid persistent concerns in Washington that Korean regulators have unfairly singled out US-listed digital companies.
minmin@heraldcorp.com