The South Korean chipmaker's ADRs priced at $149 and rose 14% on their first day of trading, in the largest-ever U.S. listing by a foreign company
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SK Hynix listed its American depositary receipts on the Nasdaq $NDAQ on Friday, with the ADRs opening at $170 per share — a 14% gain above the $149 offering price — after the South Korean memory chipmaker raised $26.5 billion in the largest U.S. share sale ever completed by a foreign company.
Until regular-way trading begins July 13, the ADRs are listed under the temporary symbol SKHYV; the ticker will then become SKHY. Each underlying common share is represented by ten ADRs. Demand for the offering exceeded supply by more than seven to one, according to Reuters. About $5 billion in ADRs went to three cornerstone investors — Baillie Gifford, Coatue Management, and Situational Awareness Partners — per Bloomberg.
SK Hynix marked the occasion with an opening bell ceremony at the Nasdaq MarketSite in Times Square $SQ, attended by SK Group Chairman Chey Tae-won, Executive Vice Chairman Chey Jae-won, and SK Hynix CEO Kwak Noh-Jung. At the opening bell ceremony, CEO Kwak Noh-Jung declared: "Today is a very proud day, and today is a truly historic day for SK Hynix." "HBM stands at the heart of the AI revolution." Speaking to CNBC, Chairman Chey Tae-won described the moment as "a dream come true."
Proceeds from the offering will fund the purchase of extreme ultraviolet lithography machines and the construction of new production facilities, according to the company's filings. The ADR offering is scheduled to close July 14, and the underlying common shares will be additionally listed on South Korea's KOSPI Market on July 29, the company said.
High-bandwidth memory chips, the product category in which SK Hynix holds the top global market position, power the AI-focused graphics processors built by companies including Nvidia $NVDA and AMD $AMD. Its customers include Nvidia and Apple $AAPL, according to CNBC. Despite a 25% retreat from the record high it touched in late June, the company's Seoul-listed shares have still surged roughly 630% compared with a year earlier.
As covered ahead of the listing, the Nasdaq debut gives U.S. investors direct access to the leading HBM supplier for the first time, and analysts have said it could help narrow the valuation gap between SK Hynix and its U.S. peer Micron $MU Technology. On a forward earnings basis, SK Hynix is valued at approximately 5.8 times, a meaningful discount to Micron's roughly 7 times multiple. Only SpaceX's blockbuster IPO from last month raised more money in the U.S. equity markets.
Chairman Chey Tae-won signaled the company could issue additional U.S. shares in the future. In his Bloomberg Television interview, Chey elaborated on the conditions needed for further issuance: "Once we have a better return, then there's more demand. The first thing we have to do is keep the stock price stable, and then hopefully in the long run we can have the upside potential."
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