US$28 billion issuances were oversubscribed! SK Hynix's ADR was closed early, showing the continued strong appeal of AI assets.

According to informed sources, the book-building process for the issuance of SK Hynix, South Korea's chip giant, of up to $28 billion American Depositary Receipts (ADRs) in the United States is set to close on Wednesday (US time) as the subscription orders far exceed the issuance size. The underwriters have decided to close the book early. SK Hynix had previously stated in regulatory filings that the final pricing of the ADR issuance will be determined on Thursday, and the stock is expected to start trading on Nasdaq on July 10. The source mentioned that the underwriters have informed investors that the book-building process will end at 4 pm Eastern Time, and pricing guidance will be announced after the close of the South Korean stock market on Thursday. The final allocation results will be determined later on Thursday in Eastern Time. The issuance, which started on Monday, will offer a total of 17.79 million new shares. Based on the issuance size, this transaction is expected to become the world's second-largest stock offering after SpaceX's record-breaking $85.7 billion IPO last month, surpassing Saudi Aramco's $25.6 billion IPO in 2019 and Alibaba Group Holding Limited's Sponsored ADR's $25.6 billion IPO in 2014. SK Hynix is a core supplier of high-bandwidth memory (HBM) globally, with its AI chip main customers including NVIDIA Corporation and Alphabet Inc. Class C, the parent company of Alphabet. According to the issuance documents disclosed on Monday, every 10 ADRs correspond to 1 common share, with a reference price calculated based on the closing price in Seoul on July 3, pricing each ADR at 242,500 Korean Won. SK Hynix declined to comment on the progress of the issuance. Market enthusiasm is high. According to the aforementioned source, US investors have submitted large purchase orders, with individual orders starting at around $200 million and some exceeding $1 billion. On Monday, SK Hynix disclosed that Baillie Gifford Overseas Limited, Coatue Management, and funds under Situational Awareness Partners had expressed their intention to subscribe, with a total intended amount of $7 billion. IFR reported on Tuesday that the ADR issuance has received multiple times coverage. The enthusiastic subscription by investors reflects a strong demand for asset allocation in leading global chip manufacturers despite the global tech stock weakening due to renewed tensions in the Middle East (SK Hynix was down 3.59% at one point on Wednesday). It is worth noting that as SK Hynix advances with the issuance, the volatile fluctuations in the South Korean stock market have not eased. On Tuesday, despite Samsung Electronics reporting a 19-fold increase in profits year-on-year, the stock still plummeted by 10%, causing the KOSPI index to trigger circuit breakers twice in a single day. On Wednesday, Hynix continued to fall, dropping 8%. Although SK Hynix's stock price has been declining this week, it has still accumulated over a 700% increase in the past year, with no signs indicating a decrease in market demand for its ADRs. Trading terms show that the demand for SK Hynix ADRs has exceeded the issuance volume.