SK Hynix shares rose 14% to $170 at the start of trading on their debut
SK Hynix’s American Depositary Receipts (ADRs) opened at $170 each—14% above the offering price of $149 per share, according to CNBC. The South Korean memory chip maker raised $26.5 billion in what is the largest-ever U.S. initial public offering by a foreign company. The shares are trading under the ticker SKHYV and will switch to the ticker SKHY on Tuesday, the network reported.
The ADRs will trade at a premium to the company’s common stock in Seoul, according to Bloomberg. This is partly due to restrictions on converting South Korean shares into American Depositary Receipts. However, the premium also reflects strong demand for direct investment in SK Hynix, a market leader in high-bandwidth memory (HBM) for AI computing.
SK Hynix’s successful mega-IPO dispelled concerns related to the recent volatility in chipmakers’ stocks and showed that investors still have a strong appetite for new stock offerings, Bloomberg notes. In recent days, investors have been considering rotating capital out of companies related to AI infrastructure. South Korea’s Kospi index entered a technical “bear” market this week before rebounding on Friday. SK Hynix shares in Seoul have fallen 25% from their record close on June 22, but are still up 235% year-to-date.
Bloomberg believes that SK Hynix ADRs could benefit from the expected narrowing of the valuation gap with its U.S. competitor, Micron Technology. Until now, it has been difficult for most U.S. investors to invest directly in SK Hynix. Micron has a market capitalization of $1.1 trillion. Its shares fell 1.7% during Friday’s trading session.
Demand for SK Hynix’s ADR offering exceeded supply by more than seven times, Bloomberg previously reported. SK Hynix’s ADR offering is taking place against the backdrop of a sharp rebound in the initial public offering (IPO) market. In the first half of this year, companies raised a record $126.8 billion through U.S. listings, excluding SPACs and other financial structures. The highlight was SpaceX’s initial public offering in June, which raised $86.2 billion.
This article was AI-translated and verified by a human editor
