Coupang Stock Looks Cheap Despite Data Breach Scandal

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Coupang, a Seattle-based technology company, has been embroiled in a data breach scandal in its main market of South Korea. Investors, nervous about the uncertainties facing the business, have sold off Coupang stock amid government hearings and investigations. However, the stock looks cheap for long-term investors, as Coupang's business in South Korea continues to perform well, with strong revenue growth, active customer growth, and positive free cash flow.

Why it matters

The data breach scandal has turned into a bigger issue than it needed to be, with Coupang making things worse. However, as long-term focused investors, this is likely to be forgotten by most Coupang customers in a few years. The company's e-commerce platform with a vertically integrated delivery network continues to delight customers, and this convenience is likely to be more important to them than the potential information leak.

The details

Coupang revealed that information from up to roughly 34 million accounts had been exposed in the data leak, after first saying the incident had been much smaller. The South Korean government launched an inquiry, and Coupang's CEO and Chairman Bom Kim skipped a parliamentary hearing on the data breach. South Korean officials blame "management failure, rather than a sophisticated cyberattack" for the data leak.

• Late last year, Coupang revealed the data breach.
• In mid-December, Coupang CEO and Chairman Bom Kim skipped a parliamentary hearing on the data breach.
• This week, Reuters reported that South Korean officials blame "management failure, rather than a sophisticated cyberattack" for the data leak.