Coupang Wins Dismissal of US Shareholder Lawsuit Over 2021 IPO

South Korean e-commerce giant Coupang has scored a decisive legal victory in the United States after a federal court dismissed a long-running shareholder lawsuit tied to the company's blockbuster 2021 stock market debut.

U.S. District Judge Vernon Broderick in Manhattan ruled that a group of investors, led by several New York City public pension funds, failed to demonstrate that Coupang and its executives intentionally misled shareholders. In an 83-page opinion, the judge found the plaintiffs did not adequately show that the company made materially false statements or ignored clear warning signs that its public disclosures were inaccurate.

The lawsuit had alleged that Coupang concealed unsafe conditions at its warehouses, manipulated search results on its platform, directed employees to write favorable reviews for its private-label products, and pressured suppliers to raise prices on competing platforms for items it automatically price-matched. Investors argued that Coupang's stock lost more than half its value within a year of the IPO as these issues came to light, pointing to South Korean regulatory probes and a warehouse fire as evidence the company's earlier statements had been misleading.

Judge Broderick rejected these arguments, characterizing many of Coupang's statements about working conditions as too vague or merely aspirational to count as misleading, while describing certain remarks about supplier relationships as either accurate at the time or amounting to routine corporate optimism rather than fraud. He also found that shareholders had not pleaded the alleged price-manipulation scheme with sufficient specificity, noting that Coupang had disclosed its practice of having employees write product reviews.

The ruling extended to the underwriters of Coupang's initial public offering, including Goldman Sachs, JPMorgan Chase and Allen & Co., against whom all claims were also dismissed. Because the dismissal was issued with prejudice, the plaintiffs cannot refile the same claims.

A Coupang spokesperson said the company had maintained from the start that the allegations lacked merit, welcoming the court's decision as confirmation of that position. Coupang, founded in 2010 by billionaire entrepreneur Bom Kim, raised $4.6 billion in its March 2021 IPO, the largest listing by a foreign company on Wall Street since Alibaba's 2014 debut. Backed by SoftBank Group, the company was headquartered in Seoul at the time of its listing and now operates out of Seattle while maintaining extensive operations across South Korea and other markets.