Following SpaceX, SK Hynix ADR Drops Below IPO Price Amid Wall Street Struggles for Super Rookies

Following SpaceX, which drew massive attention with one of the largest IPOs in history, SK Hynix's American Depositary Receipts (ADRs) have also suffered the humiliation of plunging below their initial public offering price after a sharp downward trend.

With this year's "super rookies" on the U.S. stock market showing sluggish stock performance, market observers are raising concerns about whether this downturn might impact upcoming mega-IPO events, including OpenAI.

According to the financial investment industry on Tuesday (July 28), SK Hynix ADRs closed down 7.47% from the previous session at $143.02 in overnight trading on Wall Street.

This marks a level that falls short of not only the opening price ($170) on its debut day of July 10, but even its IPO price ($149).

Compared to its intraday high of $194.80 recorded on July 14, the stock has dropped by 26.58%.

The primary background cited is the persistent global semiconductor correction trend.

Although the Philadelphia Semiconductor Index has fallen by more than 20% since late last month to the present, it still maintains a return of 63.13% compared to the beginning of the year.

As profit-taking pressure intensifies following a short-term surge, doubts have emerged regarding whether big tech companies can sustain their cutthroat spending on artificial intelligence (AI) infrastructure, keeping volatility alive.

In particular, recent anxieties surrounding China's semiconductor ambitions ("semiconductor rise") appear to have added further pressure on the stock prices of major semiconductor companies in the U.S., South Korea, and elsewhere.

ChangXin Memory Technologies (CXMT), which was listed on China's STAR Market (the Shanghai Stock Exchange's sci-tech innovation board) the previous day, closed trading at 49.0 yuan, up 465.82% from its IPO price of 8.66 yuan.

Following CXMT's successful and spectacular debut as a vanguard for China's semiconductor industry self-reliance, foreign media reports surfaced overnight that a Chinese state-owned enterprise had begun mass production of deep ultraviolet (DUV) lithography equipment for semiconductor manufacturing.

Although this equipment is several generations behind the cutting-edge extreme ultraviolet (EUV) lithography equipment used by the U.S. and South Korea, it has sparked widespread anxiety across the related industry because it achieved localization in the lithography process, which is evaluated as the biggest technical barrier in semiconductor manufacturing.

In addition, the resurfacing of concerns regarding oversupply related to Nvidia's (-4.99%) circular financing controversy in overnight New York trading also dragged down stock prices across the broader U.S. semiconductor sector, including SK Hynix ADRs.

Seo Sang-young, a managing director at Mirae Asset Securities, said, "Concerns have re-ignited in the market that over-investment risks could spread across the entire memory value chain if the practical monetization of AI businesses is delayed, as circular trading controversies resurface—claiming that Nvidia artificially creates demand through financial support and loan guarantees during the $500 billion AI infrastructure and memory cooperation agreed upon between Nvidia and the SK Group."

Prior to this, SpaceX's stock price also halved from its peak, leaving a significant number of investors in the red.

SpaceX's stock peaked intraday at $225.64 on June 16, the third day after its listing, before turning downward, and its current stock price sits at $113.50, well below its IPO price of $135.

Despite raising over $85.0 billion (approx. 125 trillion won) through its IPO driven by expectations of future profitability even while anticipating losses for the time being, heavy valuation burdens, worries over a massive release of lock-up shares in early August, and massive AI-related capital expenditures have pulled down the stock.

The successful sea recovery of the first-stage booster of the Long March-10B carrier rocket on July 10 by China Aerospace Science and Technology Corporation (CASC), a Chinese state-owned enterprise, was also cited as a backdrop for the steep decline.

This is because China has thrown down the gauntlet in the reusable rocket market previously monopolized by the United States.

As SpaceX and SK Hynix ADRs—ranking first and second in the history of U.S. IPO sizes—fail to escape sluggishness, some in the market are discussing the possibility that this may affect the IPO schedules of other anticipated stocks such as OpenAI and Anthropic.

Anthropic, evaluated along with OpenAI as one of the two major AI powerhouses, is proceeding with related procedures aiming for a listing as early as mid-October.

Recently, it also held preliminary meetings with investors arranged by underwriters such as Morgan Stanley, Goldman Sachs, and JPMorgan Chase.

Industry insiders expect Anthropic's corporate value to exceed $1 trillion upon its listing.

OpenAI is also expected to go public either this year or next year, having submitted a confidential IPO application to the U.S. Securities and Exchange Commission (SEC) in early June.
※ Please note: This article was translated by AI and may contain errors.