Why Coupang Stock Soared Today

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© Provided by The Motley Fool Why Coupang Stock Soared Today

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.

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

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.

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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.

John Mackey, CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Joe Tenebruso has the following options: long January 2023 $2400 calls on Amazon. The Motley Fool owns shares of and recommends Amazon. The Motley Fool recommends Softbank Group and recommends the following options: long January 2022 $1920 calls on Amazon and short January 2022 $1940 calls on Amazon. The Motley Fool has a disclosure policy.

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