Topline
South Korean chipmaker SK Hynix surged in its Nasdaq debut on Friday, after completing the largest U.S. share sale ever by a foreign company and becoming the third-largest debut on record following SpaceX’s record-setting listing last month.
South Korea’s SK Hynix raised $26.5 billion in its listing, making it one of the largest trading debuts ever.
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Key Facts
SK Hynix jumped 17% to around $174.50 after its Nasdaq listing opened shortly after 11:30 a.m. EST, after earlier reports indicated the company would trade as much as 21% above its offering price.
SK Hynix disclosed in a filing Thursday it would issue 177.9 million American depository receipts (ADRs), or certificates representing ownership of shares in a foreign company, priced at $149 each under the ticker “SKHYV.”
One common share will be represented by 10 ADRs, priced at $1,490—and that’s slightly higher than the company’s Seoul-based listing, which ended Friday at about $1,450.
SK Hynix raised $26.51 billion through its ADR offering, the company disclosed, making it the largest U.S. share sale ever by a foreign company and the third-largest ever, trailing Saudi Aramco’s $29.4 billion in 2019 and SpaceX’s $85.7 billion.
The funds raised will go toward expanding SK Hynix’s chipmaking facilities and purchasing advanced equipment, the company disclosed.
Investors sought more than seven times the available number of shares in SK Hynix’s U.S. offering, Reuters reported.
what to watch for
Option trading for SK Hynix is expected to start two business days after its U.S. debut, allowing investors to bet against the stock, Reuters reported, citing two sources familiar with the matter. Similar trading opened for SpaceX shortly after its debut last month, and Susquehanna analyst Chris Murphy wrote at the time that there was a 15% chance the stock would lose half its value over the next three months because of option trading.
big number
$1 trillion. That’s SK Hynix’s market value as of Friday, ranking the company as South Korea’s second-largest firm behind Samsung ($1.2 trillion) and the third-largest memory chipmaker globally. SK Hynix’s stock has already skyrocketed by 222% in South Korea this year, quickly raising its market capitalization from just over $250 billion in December to above $1 trillion for the first time in May.
tangent
Commerce Secretary Howard Lutnick reportedly pressed Samsung and SK Hynix to ramp up memory chip production in the U.S. amid a global shortage. Lutnick, speaking to Micron CEO Sanjay Mehrotra, noted he wanted to bring Mehrotra’s competitors “here to America to build,” but noted, “Micron’s leading the way, and now the others are going to be jealous, right? And they’re going to have to follow.” SK Hynix has already planned its expansion in the U.S., including a $4 billion plant in West Lafayette, Indiana, for advanced packaging.
key background
SK Hynix, founded in 1983 as a subsidiary of Hyundai, has made headlines this year as booming AI demand has constricted the global memory chip trade. The company has become the leader in high-performance memory used in AI chips from Nvidia, and SK Hynix disclosed it holds just over 56% of the global high-bandwidth memory market. Nvidia CEO Jensen Huang praised SK Hynix last month, adding that the company would continue to be Nvidia’s largest partner, as a memory chip shortage is likely to persist for a few years.