Coupang's Additional Data Breach and CEO Probe Heighten Regulatory and Legal Risks

What happened

Coupang disclosed a new data leak affecting 165,000 users, compounding the earlier breach of 33 million customers and triggering a 13% stock drop on February 5, 2026. This revelation, coupled with an investigation into interim CEO Harold Rogers for potential perjury and a pending securities class action, underscores persistent security failures and governance lapses. The DeepValue master report had already identified the initial breach as a critical risk, with potential fines up to $900M and a $1.2B voucher program threatening cash flow. The additional breach confirms that Coupang's data protection measures remain inadequate, increasing the likelihood of harsher regulatory penalties and prolonged customer distrust. Consequently, the narrative shifts from a one-time incident to an ongoing crisis that amplifies downside scenarios outlined in the report.

Implication

The new breach validates the DeepValue report's warnings about security weaknesses, likely leading to steeper fines under Korea's evolving data laws, potentially exceeding the 3% revenue cap. Customer trust erosion may worsen, impacting active user growth and revenue per customer, thereby undermining the core Product Commerce engine's margins. Legal liabilities from the class action and CEO investigation could add hundreds of millions in costs, straining cash reserves already burdened by the voucher program and capex commitments. Governance concerns may delay strategic responses, exacerbating reputational damage and slowing recovery in key metrics like free cash flow. Overall, this development increases the probability of the Bear scenario, where implied value could drop to $14, urging investors to reassess entry points below the current $20.09 price.

Thesis delta

The additional data leak and CEO investigation intensify the regulatory and reputational risks highlighted in the DeepValue report, pushing the probability weighting from the Base toward the Bear scenario. This could result in fines surpassing previous estimates, sustained customer attrition, and elevated legal expenses, necessitating a downward revision of the attractive entry point from $16 to account for heightened liabilities.