MIT and Washington University make big bets on Coupang

Coupang's office in Songpa District, southern Seoul. [NEWS1]

Coupang has attracted money from funds investing on behalf of major universities, with at least two making big bets on the money-losing e-commerce company.

According to a 13F disclosure filed Feb. 14 with the U.S. Securities and Exchange Commission, Massachusetts Institute of Technology Investment Management Company (MITIMCo) disclosed that as of Dec. 31 it owned 16.2 million shares in Coupang. The shares are worth about $343.4 million.

MITIMCo invests in a wide range of assets on behalf of the university, which itself has a $26 billion endowment.

Coupang was 64 percent MITIMCo's stock portfolio as of the reporting period, Snowflake 23 percent and Robinhood Markets 6 percent.

According a 13F filed for the period ended Dec. 13, Washington University Investment Management Company (WUIMC) owns 5,432,808 Coupang shares, worth $115.2 million. Coupang is 44 percent of its portfolio.

"U.S. universities tend to invest in low-risk unlisted stocks, but investing big in a listed company like Coupang means that the shares are undervalued," said a spokesperson for a financial company.

MIT and Washington University's investments have performed well. According to Boston's NEPC, Washington University topped a list of 58 U.S. universities with a 65.1 percent return in 2021. MIT came fifth, with a 55.5 percent return.

Coupang listed on the New York Stock Exchange in March last year with a debut price of $63.50, but has been plummeting ever since. It hit its low of $18.92 on Jan. 28 and closed at $21.10 on March 4, down 66.8 percent from the debut price.

The company reported a net loss of $1.54 billion in 2021, compared to a $463 million net loss a year earlier. It has never reported a profit since its formation in 2010.

"Coupang offers e-commerce delivery services that put Amazon's two-day delivery to shame," wrote Motely Fool's Jamie Louko. "It offers same-day, next-day, or dawn delivery for all of its orders, for free."

"The major reason why my assessment differs substantially from the assessment of Wall Street analysts is likely found in my unfavorable interpretation of Coupang's business environment — e-commerce saturation, unprofitable lateral diversification and doubtful international expansion.," "IV Trader" wrote on Seeking Alpha on Feb. 16.

BY CHOI HYUN-JU, LEE TAE-HEE [lee.taehee2@joongang.co.kr]