SK hynix (000660.KS) drew subscriptions exceeding seven times the offering volume in its bookbuilding for a listing of American Depositary Receipts (ADRs) in the United States. Despite the recent weakness in its share price, the outcome is seen as a sign that global capital has placed strong confidence in the competitiveness and mid-to-long-term growth potential of SK hynix, a leading stock in artificial intelligence (AI) semiconductors.
Bloomberg reported on the 8th that the SK hynix ADR offering, which closed for submissions at 4 p.m., succeeded in its debut as demand poured in from Asia-focused global investors, including global long-term investment funds and sovereign wealth funds.
If the offering price is set based on SK hynix's closing price of 2.076 million won on the 8th, the amount raised would reach $24.5 billion (about 37.14 trillion won). This would be the second-largest U.S. listing by a foreign company in history, following Alibaba's $25 billion. The amount to be raised through the SK hynix ADR listing was initially cited at around $29 billion, but the scale was somewhat reduced as the share price fell 30.5% from last month's peak of 2.987 million won. The offering price will be finalized during the afternoon of the 9th.
Even amid the share price correction, solid demand prospects for memory semiconductors are seen as having driven the strong debut. The largest-ever pool of cornerstone investors also added momentum throughout the offering. Cornerstone investors for the SK hynix ADR listing reportedly included Baillie Gifford and Coatue Management, as well as Situational Awareness, an investment firm specializing in AI infrastructure, which committed to purchasing up to $7 billion. Situational Awareness is a $20 billion (about 30.52 trillion won) fund founded by Leopold Aschenbrenner, a former member of OpenAI's superalignment team, with participation from Silicon Valley heavyweights, and is known for having identified key leading stocks in the recent AI rally ahead of the market.
The market is watching whether SK hynix's domestic common shares, which have recently faltered, will rebound with the ADR listing as a turning point. Alongside the view that the common shares could gain traction from the inflow of global funds, forecasts diverge over the price gap between the ADRs and the common shares. In fact, Taiwan's TSMC ADRs command a premium of about 10% to 20% over the common shares. In this regard, UBS recommended that investors sell SK hynix common shares and buy the ADRs, citing investment convenience and the premium.
The offering was managed by 13 global financial firms, including Bank of America and Citi. SK hynix ADRs will begin conditional trading on the Nasdaq Global Select Market under the ticker SKHYV starting on the 10th, converting to regular trading on the 13th. SK Group Chairman Chey Tae-won also plans to attend the ADR listing ceremony held in New York, followed by local investor relations (IR) events and client meetings. An interview with Six Five Media is also scheduled for the 12th.
