Chip giant SK Hynix raises $26.5bn as shares surge in bumper US listing
Demand for SK Hynix’s offering was reportedly over seven times more than the number of shares available, highlighting the strong investor appetite for a key company in the AI supply chain.
The bumper appetite effectively means investors were so desperate to buy the shares that the company was able to charge a price 2.9% higher than its current stock price in Seoul, rather than offering a traditional discount.
Each American depositary share is equivalent to a tenth of a Seoul-traded common share, SK Hynix said.
The offering gives US investors a way to buy SK Hynix shares without having to trade via an overseas stock exchange.
The company has pledged major investments to develop South Korea’s chip making and AI capabilities in the coming years.
“They’re using the money they’re raising from this US listing to help build more plants, to develop these high-end chips,” Shanti Keleman, co-chief investment officer at Seven Investment Management, told the BBC.
“They’re going to be building those plants in Korea and obviously the US has a lot of people willing to invest so it makes sense to go there to raise the money.”
However, Hanyang University business professor Yun Youngjin said while South Korea’s government was likely to be counting on the move to raise funds for domestic investments, a Nasdaq listing carries some risks, especially if investors move money towards the US and away from South Korea’s stock market.
In June, the country’s government unveiled plans for more than $880bn of investments in partnership with SK Hynix and Samsung.
Both SK Hynix and Samsung have stock market valuations of more than $1tn, joining a growing group of firms which includes tech giants Nvidia, Apple, Microsoft and Google-owner Alphabet.
