▲ SK Hynix
The public offering for SK Hynix's American Depositary Receipts (ADR) is expected to close with demand exceeding the target by several times, Bloomberg and Reuters reported on July 7 (local time), citing sources familiar with the matter.
According to the reports, there was strong initial demand from large, long-term institutional investors and those specializing in technology stocks. Approximately 1,000 institutional investors participated in an investor presentation held on July 6.
The offering is scheduled to close at 4:00 PM Eastern Time on July 8.
The final offering price will be determined on the afternoon of July 9, New York time.
Trading on the Nasdaq is expected to begin on July 10.
Bloomberg added that three major investment firms—Situational Awareness Partners, Baillie Gifford, and Coatue Management—have expressed interest in purchasing up to $7 billion worth of shares in this offering.
Nori Chiou, an investment director at White Oak Capital, stated, "For U.S. investors, Korean stocks, especially memory semiconductor stocks, remain relatively rare and difficult-to-access assets," adding that "this scarcity value will support demand."
Reuters explained, "The investor response reflects that there is still strong demand for SK Hynix, one of the world's largest semiconductor manufacturers, even as global tech stocks plummet amid the resumption of conflict in the Middle East."
However, Bloomberg pointed out that the deal is taking place amidst some of the most intense volatility in global semiconductor stocks seen in recent years, which remains a variable.
SK Hynix's stock price has fallen 17% so far this month and is down approximately 9% compared to the ADR conversion price specified as the reference price in the filing with the U.S. Securities and Exchange Commission (SEC).
Because of this, the size of the offering, which was expected to be $29 billion at the end of last month, could shrink to around $28 billion.
Behind this volatility is the news from July 1 that Meta Platforms is launching a cloud business to lease out its surplus artificial intelligence (AI) computing resources.
This triggered concerns that demand for High Bandwidth Memory (HBM) might not continue to grow, dragging the Philadelphia Semiconductor Index down by more than 10% over two days.
Furthermore, some analysts suggest that a $13 billion, 2x leveraged exchange-traded fund (ETF) linked to SK Hynix's stock price is structurally amplifying volatility by repeatedly executing mechanical trades to meet its daily target ratio.
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