Please ensure Javascript is enabled for purposes of website accessibility

Why Shares of Coupang Are Falling Today

By Bram Berkowitz - May 13, 2021 at 3:38PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The company reported a big loss in its earnings report for the first quarter of 2021.

What happened

Shares of South Korean e-commerce company Coupang (CPNG -2.43%) traded more than 10% lower at one point this afternoon after the company reported its earnings results from the first quarter of 2021.

So what

Coupang, which recently went public in March, gives customers the ability to get millions of items delivered on the same day they order them online. The company reported a loss of nearly $295 million in the first quarter of this year, down from a loss of nearly $105 million in the first quarter of 2019.

Total revenue in the quarter of roughly $4.2 billion grew 74% year over year, while active customers climbed 21% year over year to top 16 million.

Line with arrow moving downward.

Image source: Getty Images.

Despite the losses, Coupang CEO Bom Kim said on the company's earnings call that the company planned to further invest to strengthen its infrastructure in order to enhance its fast delivery model and wide selection of items. That investment will include $708 million to hire thousands of workers to build logistics facilities in South Korea.

Now what

Coupang's stock price has now fallen to less than $32 per share, the lowest it's been since its initial public offering. While the company and its potential to grow certainly look promising, I would probably want to see the company take steps toward profitability before buying shares.

Bram Berkowitz has no position in any of the stocks mentioned. The Motley Fool recommends Coupang, Inc. The Motley Fool has a disclosure policy.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Coupang, Inc. Stock Quote
Coupang, Inc.
CPNG
$17.24 (-2.43%) $0.43

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning analyst team.

Stock Advisor Returns
397%
 
S&P 500 Returns
128%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 08/20/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.