Korean institutional and professional investors who subscribed to the initial public offering (IPO) of U.S. space company SpaceX received not a single share. Mirae Asset Securities, the only Korean firm to join the underwriting syndicate, had been expected to be allocated up to 2,314,815 shares (about $312.5 million), but Korea was excluded in the final allocation process. By contrast, Japanese investors were reportedly allocated $2.2 billion worth of shares, or 2.9% of the entire offering. Mirae Asset Securities refunded $500 million in subscription deposits, while domestic asset managers that had sought to include SpaceX shares in space-related exchange-traded funds (ETFs) were forced to scramble to buy the stock on the open market immediately after the listing.
Some point out that the episode resulted from excessive optimism about the discretionary allocation power of leading global underwriters. Amid an explosion of global demand, firms such as Goldman Sachs and Merrill Lynch likely prioritized allocations to high-grade partner clients and sovereign wealth funds with strong long-term investment tendencies. There is also analysis that the Korean market, which lacks direct subscription by individual investors, was a lower priority for the global underwriters. In Korea, the volume allocated to Mirae Asset Securities was to be redistributed to institutional and professional investors, whereas in Japan, individual investors also subscribed directly through Mizuho Securities USA.
Mirae Asset Securities will likely find it difficult to escape criticism over its misjudgment or aggressive marketing. The Financial Supervisory Service (FSS) has also begun looking into the circumstances, with a focus on investor protection. However, this episode should not be dismissed merely as a single brokerage's error of judgment. The bigger problem is the fact that Korea alone was the only country in the global market to be entirely cut from the offering allocation. Although the KOSPI has surpassed the 8,000 mark and grown into a market where foreign investment accounts for more than 40%, Korea is still not recognized as a core partner in global capital markets. This episode should serve as an occasion to soberly examine the global competitiveness and credibility of Korea's capital market. At the same time, regulations on domestic individual investors' investment in overseas IPOs also need to be reviewed. The option of widening the path to invest in overseas IPOs by using tax-saving accounts that offer tax exemptions, as Japan does with the NISA, should also be carefully considered.
