SK Hynix’s $28B US IPO Is 7x Oversubscribed, Poised to Be the Biggest Foreign Listing Ever

SK Hynix, the South Korean memory-chip maker, is on the verge of closing its U.S. ADR offering, which has drawn more than 7x oversubscription, according to people familiar with the matter. The deal is shaping up to be the largest foreign company listing ever on U.S. exchanges. As of the close on July 9 Eastern Time, Microsoft (MSFT) was at $384.36, up 0.27% (+$1.02) from the prior close of $383.34.^[Barron's]

Record Foreign IPO on U.S. Soil

SK Hynix is issuing 177.9 million ADRs — each representing one-tenth of an ordinary share — in a deal valued at roughly $28 billion. According to Bloomberg, the offering represents about 2.5% of SK Hynix’s market cap, which has more than tripled this year to over $1 trillion, even as global chip stocks have seen sharp swings.^[Bloomberg]

Early demand has been robust from global long-only funds and tech-focused investors, sources say. Roughly 1,000 institutional investors dialed into Monday’s management call. Bank of America, Citigroup, Goldman Sachs, and JPMorgan are among the banks working on the deal.^{[Yahoo Finance]}

Institutional Demand Surges

Several marquee names have signaled interest. Bloomberg reports that Baillie Gifford, Coatue Management, and Situational Awareness Partners have indicated they intend to subscribe to up to $7 billion of the ADRs. That level of demand makes this one of the most buzzed-about U.S. IPOs in recent memory.^[Bloomberg]

Barron's notes that SK Hynix shares have surged over 600% in the past 12 months on the Korean exchange. On Thursday (July 9), the stock closed up 5.30% in Seoul, adding a positive signal ahead of the U.S. listing.^[Barron's]

Pricing and Timeline

According to Bloomberg, pricing for the ADR offering is expected to be completed by early afternoon Eastern Time on Thursday (July 9), after which trading in the underlying Korean shares will resume. The ADRs will debut on the Nasdaq Global Select Market on Friday (July 10). Because of restrictions on converting Korean-listed shares into ADRs, arbitrage may be limited, potentially causing the ADRs to trade at a premium.^[Bloomberg]

Memory Chip Market Backdrop

SK Hynix’s U.S. listing comes as the global memory-chip market remains tight. Yahoo Finance notes that the IPO gives U.S. investors a bigger slice of the memory pie, with persistent supply shortages gripping the industry. As a leading memory-chip maker, SK Hynix’s HBM (high-bandwidth memory) products are in high demand for AI computing.^{[Yahoo Finance]}

Separately, CNBC reported that chip stocks broadly rose on Thursday (July 9), with positive market sentiment. Delta Air Lines is set to report quarterly earnings Friday, and CEO Ed Bastian will appear on CNBC’s "Squawk Box." Delta shares are up 31% over the past three months but have fallen 7% from their July 2 peak.^[CNBC]

This content is for informational purposes only and does not constitute investment advice, trading advice, or any guarantee of returns.