Coupang Plummets 5.9% on Earnings Jitters: Can the E-Commerce Giant Weather the Storm?

Summary
• Coupang (CPNG) slumps 5.9% to $30.225, erasing $1.9B in market value
• Q3 revenue hits $9.3B (+18% YoY), but Developing Offerings segment bleeds $292M
• Gross margins expand to 29.4%, yet tax rate spikes to 42%

Today’s selloff in Coupang’s stock reflects a stark disconnect between its headline-grabbing revenue growth and the underlying profitability challenges in its international expansion. While the company’s core Product Commerce segment delivered robust margin expansion and $705M in adjusted EBITDA, its Developing Offerings segment—primarily driven by aggressive investments in Taiwan—reporting a $292M loss. The stock’s intraday range of $29.42 to $30.94 highlights volatile investor sentiment, with technical indicators and options activity suggesting a critical inflection point.

Earnings Optimism Clashes with Expansion Pains
Coupang’s Q3 earnings report revealed a dual-edged sword: while the Product Commerce segment surged with 24% YoY gross profit growth and 8.8% adjusted EBITDA margins, the Developing Offerings segment’s $292M loss—driven by $32% YoY revenue growth in Taiwan—exacerbated investor concerns. The 42% effective tax rate, well above the 60-65% full-year guidance, further dented margins. Management’s admission of holiday timing shifts in Korea and seasonal weather impacts on gross profit margins added to the unease. Despite CEO Bom Kim’s bullish remarks on Taiwan’s "superior customer experience" and AI-driven logistics, the market interpreted these as short-term losses with uncertain long-term payoffs.

Internet Retail Sector Mixed as Amazon Stumbles
The broader Internet Retail sector showed mixed momentum, with Amazon (AMZN) down 0.18% despite Coupang’s sharper decline. While Coupang’s 18% revenue growth outpaced many peers, its 4.5% adjusted EBITDA margin lagged behind Amazon’s 12%+ margins. The sector’s focus on margin preservation versus Coupang’s aggressive expansion in Taiwan created a divergence in investor sentiment. However, Coupang’s 20% constant currency growth in Product Commerce and 29.4% gross profit margin demonstrated its core strength, contrasting with Amazon’s recent struggles in Prime membership retention.

Options Playbook: Hedging Expansion Risks with Gamma-Driven Calls
• 200-day MA: $27.35 (below) • RSI: 60.98 (neutral) • MACD: 0.088 (bullish) • Bollinger Bands: $30.92 (lower band) • Gamma: 0.245 (high sensitivity)

Technical indicators suggest Coupang is testing key support levels near the 200-day MA and lower Bollinger Band. The RSI hovering near 61 indicates neither overbought nor oversold conditions, while the MACD’s positive crossover hints at short-term bullish momentum. For options traders, the CPNG20251114C30.5 and CPNG20251114C30 contracts stand out due to their high gamma (0.245 and 0.274) and moderate delta (0.439 and 0.567), offering sensitivity to price swings without excessive directional risk. These contracts also boast implied volatility ratios of 32.22% and 28.69%, aligning with the stock’s recent volatility.

• CPNG20251114C30.5 (Strike: $30.50, Expiry: 11/14, IV: 32.22%, Leverage: 59.17%, Delta: 0.439, Theta: -0.084, Gamma: 0.245, Turnover: 8,305): High gamma ensures responsiveness to price swings; moderate delta balances directional exposure.
• CPNG20251114C30 (Strike: $30, Expiry: 11/14, IV: 28.69%, Leverage: 44.38%, Delta: 0.567, Theta: -0.096, Gamma: 0.274, Turnover: 2,048): Strong liquidity and gamma make it ideal for volatility plays.

Payoff Analysis: A 5% downside to $28.71 would yield: CPNG20251114C30.5: max(0, 28.71 - 30.50) = $0; CPNG20251114C30: max(0, 28.71 - 30) = $0. However, a rebound to $31.50 would generate 15%+ returns on these contracts. Aggressive bulls should target a $31.50 breakout, while cautious traders may short the $30.50 put (CPNG20251114P30.5) for a 20%+ return if the stock holds above $30.92.

Backtest Coupang Stock Performance
Key findings1. Sample size: 2 qualifying events were found between 2022-01-01 and 2025-11-05 where Coupang (CPNG.N) fell by 6 % or more from one day’s close to the next. Each “event date” is the first trading day after such a −6 % close, reflecting a next-day entry assumption.2. Short-term snap-back strength: • Average 1-day return after the plunge was +6.6 %, markedly outperforming the S&P 500 proxy (0.06 %). • The outperformance persisted for roughly two weeks; by day 10 the cumulative edge vs. the benchmark exceeded 18 ppts. • After day 15 the edge faded and statistical significance diminished, suggesting gains tend to be front-loaded.3. Hit ratio: The strategy posted positive returns on half of the first 13 post-event days; from day 6 to day 13 the win-rate briefly reached 100 %.4. Caveat – limited events: Only two events met the ≥ 6 % daily drawdown filter in the 3-year window, so results are noisy. Additional years or a milder downside threshold (e.g., −5 %) could improve robustness.Methodological notes & default choices• “Intraday plunge” was approximated with a ≥ 6 % drop in close-to-close returns because high/low data for true intraday extremes were unavailable in the standard daily OHLC feed. • Buy signal was set to the next trading day’s open following the qualifying drop; exit was evaluated across the next 30 trading days. • Benchmark: CPNG’s own price path (buy-and-hold) over matching periods, as per the event_backtest_engine default. • Data span: 2022-01-01 → 2025-11-05, using adjusted close prices.Interactive resultsBelow is an embedded interactive module where you can explore the full event-by-event equity curve, cumulative PnL, and day-by-day statistics. Feel free to adjust the holding-period window or export the data for deeper analysis.Let me know if you’d like to:• Broaden the trigger (e.g., −5 % or −4 %) to capture more events. • Test alternative exit rules (fixed 5-day hold, profit-take/stop-loss, etc.). • Compare against peers or the market instead of CPNG buy-and-hold. • Dive into intraday data (if available) for true within-day drawdowns.

Coupang at Crossroads: Hold for AI-Driven Turnaround or Exit on Expansion Fatigue?
Coupang’s Q3 results underscore a critical juncture: its core business is firing on all cylinders, but its high-risk expansion into Taiwan and AI investments remain unproven. The stock’s 5.9% drop reflects skepticism about sustaining margin growth while absorbing $292M in losses. Investors must watch the $30.50 support level and the 200-day MA ($27.35) as key inflection points. For now, the CPNG20251114C30.5 call offers a high-gamma play on a potential rebound, while the sector leader Amazon’s -0.18% move signals broader retail sector caution. If Coupang’s AI-driven logistics and Taiwan strategy deliver Q4, this could be a buying opportunity—but patience is key.