SK Hynix's planned U.S. listing has attracted orders exceeding seven times the number of available shares, underscoring strong institutional appetite for the South Korean memory chipmaker ahead of Friday's Nasdaq $NDAQ debut, according to Bloomberg.
According to Reuters, the sale encompasses 177.9 million ADRs, with final pricing scheduled for Thursday. Shares are slated to debut on the Nasdaq Global Select Market under the symbol SKHY the following day. Ten ADRs represent one common share. SK Hynix stock closed up 5.3% Thursday in Seoul at 2.186 million won, or roughly $1,445.
Bloomberg reported that the book drew participation from a broad range of institutions, among them long-only generalist funds, funds dedicated to the technology sector, sovereign wealth funds, and globally oriented investors focused on Asia. A spokesperson for SK Hynix declined to comment on the oversubscription, Reuters said.
"I think it shows strong investor interest," Vey-Sern Ling, managing director at Union Bancaire Privee, told Bloomberg. "There's no evidence of a slowdown in demand for memory chips, even though market participants have appeared jittery in recent days."
A price matching Thursday's Seoul close would yield proceeds of roughly $25.71 billion, Barron's calculated — enough to claim the record for the biggest ADR offering ever completed, edging past the $25 billion Alibaba raised during its 2014 U.S. market entry.
Three anchor investors — Baillie Gifford Overseas, Coatue Management, and Situational Awareness Partners — have together signaled appetite for as much as $7 billion worth of the ADRs, Reuters reported. Bank of America $BAC, Citigroup $C, Goldman Sachs $GS, and JPMorgan $JPM Chase are leading the offering, joined by nine other institutions.
SK Hynix launched formal marketing for the listing earlier this week, targeting $28.21 billion through the ADR sale to fund expansion of South Korean manufacturing facilities and equipment purchases including extreme ultraviolet lithography scanners. The company originally filed with the SEC in late June at a higher per-share reference price of 2.555 million won before revising that target downward after its stock declined.
Reuters noted that analysts see the Nasdaq debut as a potential catalyst for closing the discount at which SK Hynix trades relative to Micron $MU Technology — a gap currently visible in their respective forward earnings multiples of 5.5 times for the Korean firm against 6.66 times for its American counterpart. SK Hynix holds roughly 57% of global high-bandwidth memory revenue, according to Counterpoint Research data cited by Bloomberg.
