Bloomberg reported that the failure of South Korean retail investors to receive any shares in the SpaceX initial public offering (IPO) on the U.S. Nasdaq market was due to a misunderstanding regarding the order submission process, which resulted in 1.1 billion dollars, or approximately 1.7 trillion won, in subscription demand from Korean investors failing to be processed as actual orders.
The media outlet reported on June 30 (local time), citing sources familiar with the matter, that the lead underwriters for the SpaceX IPO sent emails to about 20 syndicate members in mid-May requesting information on investor demand for SpaceX IPO shares.
Citing some sources familiar with the situation at Mirae Asset Securities, the report stated that in the process of responding to this request, Mirae Asset Securities perceived that it had submitted subscription orders for its clients.
In contrast, the lead underwriters reportedly considered Mirae Asset Securities' response as a mere indication of interest rather than an official order.
As a result, the sources said that the 1.1 billion dollars in demand from Korean investors was not entered as an order.
Bloomberg reported that actual orders were entered in June, following a separate email sent by the lead underwriters in accordance with Wall Street practices for large-scale IPOs.
The report explained that Wall Street lead underwriters determined that Mirae Asset Securities had not submitted a single order for retail investor allocation, and consequently, did not allocate any shares to Mirae Asset Securities for retail investors.
In response, Mirae Asset Securities refuted the report, stating, "We applied for 1.14 billion dollars, which was collected through the domestic subscription process, in accordance with the procedures and systems guided by the lead underwriting group in June, and we received official confirmation regarding this from the lead underwriters."
The company added, "We cannot overlook reports that slander our firm through sources of unknown origin," and stated, "We are also reviewing legal action."
Mirae Asset Securities, which participated as a member of the syndicate alongside about 20 major global financial firms, had initially been expected to underwrite 2.31 million shares of SpaceX Class A common stock.
SpaceX, which was listed on the Nasdaq on June 12, closed its first day of trading at 161.11 dollars, up 19 percent from its IPO price.
Through this IPO, SpaceX raised a total of 85.7 billion dollars, or approximately 133 trillion won, the largest amount in history.
The Financial Supervisory Service (FSS) is currently conducting an inspection of Mirae Asset Securities regarding this incident.
The FSS plans to investigate the entire process leading to the failure of the IPO share allocation, with a focus on investor protection.
(Photo: AP, Yonhap News)