SK Hynix’s $28 billion U.S. listing was several times oversubscribed before pricing on Thursday, people familiar with the matter said. The South Korean memory chip maker's offering attracted enthusiastic subscriptions from global long stock funds and technology-focused investors.
About 1,000 institutional investors participated in a roadshow conference call held by management on Monday, people familiar with the matter said. A spokesman for SK hynix did not respond to a request for comment. International Financing Review first reported the subscription status of the offering.
SK Hynix launched a promotion campaign on Monday and plans to issue 177.9 million American depositary receipts (ADRs). Based on the closing price of its Korean ordinary shares last Friday, the issuance size is approximately US$28 billion. That would put it on track to set a record for the largest-ever U.S. listing by a foreign company.
Each ADR represents one-tenth of an ordinary share. The issuance is equivalent to 2.5% of SK Hynix’s market capitalization. Despite sharp fluctuations in global chip stocks, the company's market value has more than tripled this year to more than $1 trillion.
The ADR issuance is expected to be priced early Thursday afternoon, New York time, before the Korean stock market opens, and the ADR will be listed on the Nasdaq Global Select Market on Friday, people familiar with the matter said.
As there are restrictions on the conversion of Korean listed stocks into ADRs, arbitrage trading may be limited or result in ADRs trading at a premium compared to ordinary stocks.
Underwriting banks include Bank of America, Citigroup, Goldman Sachs Group Inc. and JPMorgan Chase & Co.
Baillie Gifford, Coatue Management and Situational Awareness Partners have expressed interest in subscribing for up to $7 billion worth of ADRs in the initial offering.