Why Coupang Stock Soared This Week
Shares of South Korean e-commerce company Coupang (NYSE: CPNG) were up this week after The Korea Times reported that the company may be able to refinance its outstanding debt with Goldman Sachs (NYSE: GS). As of 3:44 p.m. EDT on Friday, the stock was up 8.4% for the week.
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Recently, a fire burned down a warehouse owned by Coupang. At first, this seemed like bad news for the company, and the stock took a hit because of it. However, Coupang was using inventory at its warehouse as collateral on the debt it had sold to Goldman Sachs. With the warehouse burned down, The Korea Times is reporting that Goldman Sachs will likely ask for early repayment on this debt, which will allow Coupang to obtain new loans at a lower interest rate. The original loan had a 5.5% interest rate, and industry insiders think that Coupang can get new financing with annual interest rates close to 2%. This is beneficial to Coupang because it lowers its cost of capital, allowing the company to expand without incurring huge interest expenses.
Source Fool.com
