CPNG - Coupang just came to rescue Farfetch

2023-12-18 12:56:42 ET

Trading in Farfetch Ltd (NYSE: FTCH) has been halted on Monday after Coupang Inc (NYSE: CPNG) confirmed plans of buying its “business and assets”.

Farfetch will get emergency funding

The agreement includes $500 million in emergency funding that Farfetch will receive from Coupang to continue its operations.

Greenoaks has partnered with the New York listed firm for the said investment in Farfetch.  Bom Kim – the Chief Executive of Coupang said in a press release today:

We see tremendous opportunities to redefine the customer experience for luxury clients everywhere.

Note that Farfetch Ltd has been struggling with a decline in revenue that printed at $572 million – down about 1.3% in its latest reported quarter . Wall Street currently has a consensus “hold” rating on shares of the London-based company.

Farfetch was running risk of default

Farfetch Ltd says it would have failed to “ continue as a going concern ” without the lifeline it received from Coupang on Monday.

The eCommerce company will be liquidated and delisted from the New York Stock Exchange following the aforementioned acquisition – and its shareholders will not recover their outstanding investments.

Also on Monday, Richemont cited the Coupang news and announced termination of an agreement that entailed “sale of a majority stake in YNAP to Farfetch and Symphony Global”.

Coupang Inc had over $5.0 billion in cash and equivalents (including restricted cash) at the end of its third financial quarter. Its shares are down close to 5.0% at writing.

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