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Sunday, June 26, 2022

Coupang share: sold the main investor!

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the cupang-Share (NASDAQ:AMD), like many other tech stocks, has since slumped. From the all-time high of EUR42.86, it has risen to EUR16.20. Down more than 60%, the South Korean e-commerce player joins many other growth stocks that have fallen in the current volatile market environment.

Is now a good time to sell Coupang shares? Not if we are guided by the price. However, if you are not convinced of the general combination in a company-oriented way. However, a larger investor has now divested a block of shares. Let’s take a look at what could be the possible reasons for this.

Coupang shares: major investor sold

Specifically, it is Softbank, which sold Coupang shares on a larger scale. Several US media recently reported that the tech investor had sold a block of shares worth US$1 billion. This, in turn, emerges from the official presentations.

Therefore, Vision Funds sold the shares at a price level of US$20.87 per Coupang share. However, Softbank still has 461 million shares outstanding after selling around 50 million. This shows that it is more of a smaller partial sale and not a larger sale of the block of shares, at least so far.

Context could be crucial. With a market capitalization of $31.7 billion, Coupang is anything but oversized. But Softbank, and Vision Funds in particular, are actually looking for smaller, more dynamic growth stocks. As such, after the 2021 IPO, it may simply be that the fund managers have decided to withdraw some of the funds from that holding and reinvest them in other opportunities.

Another exciting opportunity in eCommerce!

However, Coupang shares are and will continue to be a great opportunity in e-commerce. Bill Gates, among others, is confident in sharing with his foundation, showing that the long-term potential here has not been exhausted. At least for venture-focused buy-and-hold investors who aren’t focused on smaller tech companies like Softbank.

With a current market cap of $31.7 billion, the price/sales ratio is currently below 2. With 54% sales growth in 2021, this growth story is intact. While profitability is still a work in progress, a net loss of $1.54 billion definitely suggests there is still room to grow. But the quality of the growth story is also correct.

Coupang’s share management invests heavily in its own logistics and warehouse chain in order to reach South Korean consumers as quickly as possible. Quick business adaptations and blazing-fast overnight deliveries promise a strong track record.

An ecosystem of nearly 18 million shoppers who contributed an average of $283 in revenue last quarter also bodes well. As a business-oriented investor, therefore, I would not sell Coupang shares with a long-term perspective. At least not with the prospects and with this rating if I didn’t have to.

The article Coupang Quota: the best investor sells! first appeared in The Motley Fool Germany.

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Vincent owns Coupang shares. The Motley Fool owns shares of and recommends Coupang.

Motley Fool Germany 2022

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