Coupang, Inc.
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CONTACT:
Portnoy Law Firm
Lesley F. Portnoy, Esq.,
www.portnoylaw.com
Office: 310.692.8883
1800 Century Park East, Suite 600
Los Angeles, CA 90067
info@portnoylaw.com
On February 12, 2021, Coupang filed a registration statement for the IPO on Form S-1, which was declared effective on March 10, 2021 (the “Registration Statement”). On March 11, 2021, Coupang filed a prospectus for the IPO on Form 424B4, which incorporated and formed part of the Registration Statement. Pursuant to the Registration Statement, Coupang sold 100 million Coupang Class A common stock at $35 per share, for total gross proceeds of $3.5 billion.
Plaintiff alleges that the Registration Statement failed to disclose the following adverse facts that existed at the time of the IPO: (a) Coupang was engaged in improper anti-competitive practices with its suppliers and other third parties; (b) Coupang had improperly adjusted search algorithms and manipulated product reviews to prioritize its own private-label branded products over those of other sellers and merchants, to the detriment of consumers, merchants, and suppliers; (c) Coupang was selling products to non-member customers at lower prices than those offered to its Rocket WOW members; (d) Coupang subjected its workforce to unhealthy working conditions; and (e) Coupang’s lower prices, historical revenues, competitive advantages, and market share were the result of systemic, improper, unethical, and/or illegal practices, and, thus, unsustainable.
On or around April 27, 2021, less than two months after the IPO, United Press International reported on systemic, unsafe working conditions for Coupang’s delivery drivers and employees.
On June 17, 2021, a deadly fire broke out in the basement of Coupang’s Deokpyeong Logistics Fulfillment Center, located south of Seoul. Aside from consumer criticism, the fire cost Coupang approximately $296 million in lost inventory, property, equipment, and other costs.
On September 10, 2021, the Korean Fair Trade Commission (“KFTC”) announced that Coupang was participating in, and would be regulated for, search algorithm manipulation that had improperly prioritized its own products over those of third-party sellers. This was a significant expansion of the regulator’s prior findings about Coupang.
On March 22, 2022, Korea JoonAng Daily reported that the KFTC was now reportedly examining claims that Coupang had manipulated product reviews for its private-label branded products to make them appear more positive.
Finally, on July 13, 2022, The Korea Times issued an article entitled “Coupang, Naver Hit By Antitrust Allegations,” which reported that Coupang was now also under investigation by the KFTC for falsely advertising the membership benefits of its Rocket WOW membership services. On this news, Coupang’s stock fell over 34%, to close at $13.46 per share on June 14, 2022.
