Coupang FTC fine may weigh on investor sentiment, says JPMorgan

JPMorgan keeps an Overweight rating on Coupang with a $28 price target after South Korea’s Fair Trade Commission levied a 140B won one-off fine with regard to the company’s alleged manipulation of search listing algorithm in favor of its own products. The fine is the largest penalty levied in the e-commerce space, which will likely be booked as a one-time expense in the Q2 results, the analyst tells investors in a research note. The firm says Coupang has restructured its search listing algorithm after the FTC’s investigation, and the potential business impact is likely to be limited given many of its users’ “strong preference” in first-party products versus third party. However, JPMorgan believes the FTC’s regulatory repercussion “may weigh on investor sentiment, in the near term.