SK Hynix’s Offering Reportedly Oversubscribed Multiple Times Amid Prolonged Memory Stocks Sell-Off

According to a Bloomberg report on Tuesday, the offering has attracted strong interest from global long-only investors and technology-focused funds.

• The report added that around 1,000 institutional investors participated in the company’s marketing call.
• According to an SEC filing on Monday, SK Hynix is looking to sell 177.9 million ADS.
• Funds managed by Baillie Gifford, Coatue Management, and Situational Awareness Partners have indicated interest in buying up to $7 billion worth of ADSs.

South Korean chipmaker SK Hynix appears set for a blockbuster U.S. market debut, with its planned $28 billion listing drawing overwhelming investor demand as the offering has already been oversubscribed multiple times ahead of pricing later this week.

According to a Bloomberg report on Tuesday, the offering has attracted strong interest from global long-only investors and technology-focused funds. If completed as planned, it would become the largest-ever U.S. listing by a foreign company, eclipsing Alibaba’s (BABA) $25 billion listing in 2014.

ADS Pricing Expected On July 9

The report added that around 1,000 institutional investors participated in the company’s marketing call. The American depositary shares (ADS) offering is expected to be priced on Thursday, ahead of the stock’s Nasdaq Global Select Market debut on Friday, the report added.

Several major investors, including funds managed by Baillie Gifford, Coatue Management, and Situational Awareness Partners, have indicated interest in buying up to $7 billion worth of the company’s ADSs.

SK Hynix To Sell 177.9 million ADS

According to an SEC filing on Monday, SK Hynix is looking to sell 177.9 million ADSs. The filing mentioned a reference price of KRW242,500 per ADS ($158.14), based on SK Hynix’s closing price on July 3. Reuters previously reported that the ADSs are expected to be priced at $166 each.

The offering is also structured to ensure that SK Square, the company’s largest shareholder, retains at least a 20% stake, in line with South Korean regulations.

SK Hynix said the proceeds will be used for general corporate purposes, including capital spending on new semiconductor manufacturing facilities in South Korea and the purchase of advanced extreme ultraviolet (EUV) lithography equipment.

Chip Stocks Decline

The IPO comes at a time when semiconductor stocks are facing heavy selling pressure. Shares of Micron Technology (MU) fell more than 6%, SanDisk (SNDK) crashed nearly 10%, and Western Digital Corp. (WDC) slumped 9% as of this writing.

Mike Bailey, director of research at FBB Capital Partners, told CNBC on Tuesday that expectations are up, and fundamentals are struggling to meet the sky-high demands, which is fueling the decline. “I would expect the rotations that we’ve seen to continue.”

The Roundhill Memory ETF (DRAM) and VanEck Semiconductor ETF (SMH) also posted sharp losses.

Among ETFs tracking benchmark indexes, the SPDR S&P 500 ETF (SPY) fell 0.2%, Invesco QQQ Trust (QQQ) declined 1.3%, while the SPDR Dow Jones Industrial Average ETF Trust (DIA) was trading 0.3% lower.

For updates and corrections, email newsroom[at]stocktwits[dot]com.<