SK hynix [Reuters=Yonhap News file photo]

SK hynix announced on the 10th (local time) that it has finalized the initial public offering (IPO) price for its American Depositary Receipts (ADRs) at $149 per share.

The offering consists of 177.9 million ADRs (2.5% of issued shares). One ADR represents one-tenth of a common share in Korea. This price is approximately 2.9% higher than SK hynix's closing price on the previous day (2.186 million KRW, or about $1,445).

Through this offering, SK hynix will raise a total of $26.507 billion (approximately 40 trillion KRW). While large-scale IPOs typically involve pricing at a discount to the existing stock price to secure investors, SK hynix successfully achieved "premium pricing," setting the offering price higher than its current market value.

An official from SK hynix explained that this is the only instance of premium pricing in the history of U.S. IPOs.

This can be interpreted as a sign that global investors have placed a high valuation on SK hynix’s corporate value and growth potential.

Demand during the book-building process reached $200 billion (approximately 301 trillion KRW), exceeding the offering size by more than seven times. It is reported that there was a massive influx of demand from large institutional investors, including global long-term investment funds, technology-focused funds, sovereign wealth funds, and investors specializing in the Asian market.

The Financial Times (FT), citing sources, reported that around 500 investment institutions participated in the offering.

It is reported that about half of the issued shares were allocated to the top 10 accounts. Bloomberg noted that the top 25 accounts secured about two-thirds of the total offering.

Although firms like Baillie Gifford, Coatue Management, and Situational Awareness reportedly expressed interest in investing up to $7 billion, the FT noted that their final allocations were smaller than their initial requests due to the high popularity of the offering.

The offering was managed by four underwriters: BofA Securities, Citigroup, Goldman Sachs, and JPMorgan. The FT projected that their combined fees alone would exceed $140 million (approximately 200 billion KRW).

The FT pointed out that this offering joins the wave of large tech company capital raises that have heated up Wall Street this summer, following the massive fundraising efforts by SpaceX and Google’s parent company, Alphabet.

SK hynix will begin conditional trading on the 10th (U.S. Eastern Time) under the ticker symbol "SKHYV." Regular trading will commence under the ticker "SKHY" starting the 13th, with the offering process expected to conclude on the 14th.

SK hynix is scheduled to ring the opening bell at the Nasdaq MarketSite in New York's Times Square this morning, with Chairman Chey Tae-won, CEO Kwak Noh-Jung, and other executives in attendance.

Meanwhile, it appears that SK hynix has kept the door open for additional ADR listings.

According to the F-6 form for depositary receipts filed by SK hynix with the U.S. Securities and Exchange Commission (SEC), the registered ADR volume is 1.78 billion shares, which is about 10 times the size of this current offering.

This suggests that the company has pre-registered a limit for converting up to 25% of its issued shares into ADRs, to be held by the depositary bank, Citibank.

Additionally, in a separate prospectus (F-1/A) filed with the SEC, SK hynix stated, "For investors who wish to buy by converting ADRs into common shares in the secondary market after the completion of the offering, we have submitted a separate Korean language securities registration statement to the Financial Services Commission of Korea."

This means that conversion between common shares and ADRs is possible, and the necessary domestic regulatory procedures for this are being processed separately.

SK hynix's SEC filing (F-6) [Captured from SEC disclosure]