Coupang's 6.13% Plunge: Earnings Optimism vs. Strategic Woes Spark Volatility

Summary
• Coupang (CPNG) tumbles 6.13% intraday to $28.065, breaching key support levels.
• Q2 2025 revenue surges 16% YoY to $8.5B, but 84% tax rate and $235M EBITDA losses in developing markets trigger sell-off.
• ProShares Online Retail ETF (ONLN) rallies 1.33% as sector peers diverge.
• Macquarie upgrades price target to $35, while Deutsche Bank downgrades to Hold at $27.
Coupang’s earnings report revealed a stark dichotomy: robust top-line growth clashing with profitability headwinds. The stock’s sharp decline reflects investor skepticism over Taiwan expansion costs and tax inefficiencies, despite margin expansion in core operations. With intraday lows at $27.23 and a 52W range of $19.02–$31.645, the stock faces critical technical junctures.

High Tax Rates and EBITDA Losses Overshadow Earnings Optimism
Coupang’s 6.13% intraday drop stems from a combination of structural profitability concerns and strategic overhangs. While Q2 revenue hit $8.5B (+16% YoY), the 84% effective tax rate—driven by losses in Taiwan and restructuring costs—sharply diluted net income to $32M. Developing offerings reported $235M EBITDA losses, with full-year guidance projecting $900–$950M in red ink from aggressive Taiwan investments. Analysts highlighted these outflows as a drag on near-term margins, overshadowing 230-basis-point gross margin expansion in product commerce. The market’s bearish pivot also reflects skepticism over CEO Bom Kim’s assertion that AI-driven efficiency gains will offset these costs, given the stock’s 184x dynamic P/E ratio.

Internet Retail Sector Splits as Amazon Rises, Coupang Falls
The Internet Retail sector remains fragmented, with Amazon (AMZN) surging 3.69% on strong Q2 results, while Coupang’s 6.13% decline highlights divergent investor sentiment. ProShares Online Retail ETF (ONLN) advanced 1.33%, buoyed by Amazon’s performance, but Coupang’s underperformance dragged on thematic exposure. Deutsche Bank’s downgrade of CPNG to Hold at $27 contrasts with Macquarie’s Outperform rating at $35, underscoring the sector’s polarized view on e-commerce expansion risks versus long-term margin potential.

Bearish Options and ETFs in Focus as CPNG Tests Key Levels
• 200-day average: 25.168 (below current price)
• RSI: 35.46 (oversold)
• MACD: 0.027 (bullish divergence)
• Bollinger Bands: 28.86–31.78 (current price near lower band)
• Support/Resistance: 28.86 (lower band), 30.32 (middle SMA), 31.78 (upper band)
• ONLN ETF: ProShares Online Retail ETF (ONLN) at $53.98 (+1.33%) offers leveraged exposure to sector strength, though Coupang’s underperformance may limit upside.
• Key levels: A break below 28.86 (lower Bollinger Band) could trigger a test of 23.51 (200D support), while a rebound above 30.32 (middle SMA) may attract short-term buyers.
Top Options Picks:
1. CPNG20250815C28 (Call, $28 strike, 8/15 expiry):
- IV: 28.94% (moderate)
- Leverage: 46.08%
- Delta: 0.55 (moderate sensitivity)
- Theta: -0.0895 (high time decay)
- Gamma: 0.2938 (high sensitivity to price swings)
- Turnover: 29,659 (high liquidity)
- Payoff (5% downside): $0.00 (strike at $28, price at $26.66 → no intrinsic value).
- Why: High gamma and leverage make this contract responsive to volatility, ideal for a bearish breakout.
2. CPNG20250815C28.5 (Call, $28.5 strike, 8/15 expiry):
- IV: 27.24% (moderate)
- Leverage: 80.31%
- Delta: 0.398 (moderate sensitivity)
- Theta: -0.0702 (high time decay)
- Gamma: 0.3045 (high sensitivity to price swings)
- Turnover: 1,611 (solid liquidity)
- Payoff (5% downside): $0.00 (strike at $28.5, price at $26.66 → no intrinsic value).
- Why: High leverage and gamma position this for aggressive short-term moves, though time decay risks erode value if the stock consolidates.
Action: Aggressive bears may consider CPNG20250815C28 for a breakdown below $28.86, while CPNG20250815C28.5 offers leveraged exposure to volatility. Watch for a $30.32 retest to gauge near-term direction.

Backtest Coupang Stock Performance
CPNG has historically shown positive short-to-medium-term performance following a -6% intraday plunge. The backtest data reveals that:1. Frequency and Win Rates: The event occurred 521 times over the past five years. The 3-day win rate was 49.14%, the 10-day win rate was 50.10%, and the 30-day win rate was 52.21%. This indicates a higher probability of a positive return in the short to medium term after the intraday plunge.2. Returns: The average 3-day return was 0.15%, the 10-day return was 0.29%, and the 30-day return was 0.96%. While the returns seem modest, they are positive, suggesting that CPNG tends to recover and even exceed its pre-plunge levels in the short term.3. Maximum Return: The maximum return during the backtest period was 1.33%, which occurred on day 59. This highlights that CPNG can experience significant gains in the month following a -6% intraday plunge.In conclusion, CPNG has a favorable track record of positive short-to-medium-term performance after experiencing a -6% intraday plunge. Investors might consider this information when assessing the potential impact of such events on CPNG's future returns.

Bullish Breakout or Bearish Breakdown? Key Levels to Watch
Coupang’s 6.13% decline has positioned the stock at a critical inflection point, with technical indicators suggesting a potential reversal or continuation. The RSI at 35.46 hints at oversold conditions, but the 200-day average at $25.168 remains a formidable hurdle. A breakdown below 28.86 (lower Bollinger Band) could accelerate the slide toward 23.51, while a rebound above 30.32 (middle SMA) may attract algorithmic buyers. With Amazon (AMZN) surging 3.69%, sector momentum favors long-term holders, but Coupang’s strategic overhangs demand caution. Act now: Monitor the 28.86 support level—break below triggers a bearish trade, while a rebound above 30.32 signals a potential bounce.