SK hynix eyes second-largest foreign listing in U.S. history with $24.5B ADR offering 

Global investors placed orders for more than seven times the shares in SK hynix's American depositary receipt (ADR) offering, signaling strong early demand and to serve as a key test of whether the current AI-driven memory supercycle has more room to run. 

“The sale of 177.9 million ADRs has attracted demand from institutional investors, including global long-only funds, technology sector-focused funds, sovereign wealth funds and Asia-focused global investors,” according to Bloomberg. Total orders reportedly stand at about $171.5 billion.

The ADR issuance is equivalent to 17.79 million common shares. ADRs are certificates issued by U.S. banks that represent shares in a foreign company, allowing American investors to trade them on U.S. exchanges in dollars without the company needing to go through the full process of listing its shares directly on a U.S. stock market.

The lead underwriters closed the order book at 4 p.m. on Wednesday, U.S. time. The final offering price is scheduled to be set on Thursday afternoon.

If the ADRs are priced based on SK hynix’s Wednesday closing price of 2.08 million won ($1,380) on the Korea Exchange, the company would raise about $24.5 billion.

That would make it the second-largest U.S. listing by a foreign company on record, just behind Chinese firm Alibaba’s $25 billion offering.

The proceeds will be used to build production facilities, including the first plant at the Yongin semiconductor cluster in Gyeonggi and a packaging plant in Cheongju, North Chungcheong.

SK Group Chairman Chey Tae-won will attend the ceremony marking chipmaker SK hynix's Nasdaq listing of its American depositary receipts (ADRs) in New York on Friday, where he is expected to meet global investors in person.

Chey will be joined by key executives, including SK hynix CEO Kwak Noh-jung, to present the company's business performance and long-term growth strategy. He is also expected to meet major customers including Nvidia and Tesla to discuss cooperation on AI memory.

SK hynix expects the ADR listing to improve access for global institutional investors who face difficulties investing directly in the Korean stock market, while enhancing the company's market value.

The market had initially expected the ADR sale to raise roughly $29 billion, but that projection declined following the company’s recent share price pullback.

SK hynix shares hit a record intraday high of 2.99 million won on June 25 before retreating due to concerns the semiconductor rally had become overheated.

SK hynix's ADRs will begin trading on Nasdaq under the temporary ticker symbol "SKHYV" on Friday. This initial phase, known as interim trading, allows investors to buy and sell shares before the deal is fully finalized. Regular trading under the permanent ticker "SKHY" kicks off Monday once the offering is officially closed. Settlement follows on Tuesday, when shares and payments are officially transferred between buyers and sellers.

On July 29, the newly issued shares from the ADR offering will also be listed on the Kospi market of the Korea Exchange, making them available for trading in Korea as well.

The Korean chipmaker also expects both its ADRs and domestic shares to gain momentum following the release of its second-quarter earnings on July 29. The company's second-quarter revenue is projected at 85 trillion won to 88 trillion won, while operating profit is expected to reach 65 trillion won to 70 trillion won.

BY KIM KYUNG-MI, JEONG JAE-HONG, LEE JAE-LIM [[email protected]]