SK Hynix Inc. confirmed explosive demand from global investors in its initial public offering (IPO) conducted ahead of its listing on the US Nasdaq market, setting an unprecedented new record. As its monopoly status in the high bandwidth memory (HBM) market, the core of artificial intelligence (AI) semiconductors, was reflected, the IPO price was final-confirmed at a level higher than the domestic stock price.
SK Hynix announced on the 10th (Korean time) that it has confirmed the IPO price of 177.9 million shares of American Depositary Receipts (ADRs) at $149 (approximately 224,975 KRW) per share.
Considering that one ADR corresponds to one-tenth of a Korean common share, this IPO price is about 2.9% higher than the closing price of SK Hynix common stock on the Korean stock market the previous day, which was 2,186,000 KRW (based on the won/dollar exchange rate of 1509.9 KRW).
In the case of large IPOs, it is customary to discount the IPO price to attract investors, but SK Hynix succeeded in issuing with a premium instead. This is analyzed as a result of global financial markets highly evaluating the company's leadership in HBM and next-generation memory, leading to a rush of oversubscriptions.
Through this offering, SK Hynix will raise a massive amount of capital totaling $26.507 billion (approximately 40 trillion KRW). This surpasses the record set by China's Alibaba ($25 billion) in 2014, making it the largest US IPO in history for a foreign company. Even including US domestic companies, it is the second-largest in history following Elon Musk's space company SpaceX ($85.7 billion).
The 40 trillion KRW in funds secured this time will be fully invested in accelerating the company's expansion into the global AI market. In particular, concentrated investments will be made in establishing the advanced packaging production base currently under construction in Indiana, USA, and in the research and development (R&D) of next-generation AI memory semiconductors.
As the US ADR price was formed higher than the domestic common stock amid a high exchange rate situation, it is expected to act as upward pressure on the stock price of SK Hynix in the KOSPI market in the short term. Analysts also say that as arbitrage demand between the US and Korean stock markets flows in, the phenomenon of stock price synchronization could strengthen.
SK Hynix will begin conditional when-issued trading on the Nasdaq market today under the ticker symbol 'SKHYV'. Regular trading will be available under 'SKHY' starting from the 13th, and the offering procedure is scheduled to be finalized on the 14th. Bank of America (BofA), Citigroup, Goldman Sachs, and J.P. Morgan jointly served as the underwriters for the offering.
