SK hynix ADR draws sevenfold demand ahead of Nasdaq debut: Bloomberg

Global investors placed orders for more than seven times the shares in SK hynix's American depositary receipt (ADR) offering, Bloomberg reported on Thursday.

“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 the U.S. media. Total orders reportedly stand at about $171.5 billion.

The ADR issuance is equivalent to 17.79 million common shares.

The lead underwriters closed the order book at 4 p.m. on Wednesday. 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), 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 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.

The stock closed on Wednesday down 30.5 percent from its record high.

Shares of U.S. rival Micron Technology also underwent a sharp correction over the same period.

Even so, major global institutional investors, including Baillie Gifford, Coatue Management and Situational Awareness, indicated their intent to purchase up to $7 billion in ADRs.

Bank of America, Citi, Goldman Sachs, JPMorgan Chase and nine additional securities firms are serving as joint lead underwriters for the deal.

SK hynix’s ADRs will begin interim trading on the Nasdaq Global Select Market under the ticker symbol “SKHY” on Friday, with regular trading set to start on Monday.

BY JEONG JAE-HONG [[email protected]]