According to a Bloomberg report, at this price point, SK Hynix’s issue would value the offering at $26.5 billion.
- This is slightly lower than the previously reported estimate of $29.4 billion, wherein the ADRs were expected to be priced at $166 each.
- SK Hynix is expected to set the final price of its U.S. offering on Thursday, with trading expected to begin on Friday.
- Jim Cramer cautioned against banks highlighting the heavy oversubscription of SK Hynix's U.S. offering, calling it "a dangerous game."
SK Hynix Inc. (SKHY) could price its U.S. offering at $149 per American Depositary Receipt amid recent volatility in the company’s shares listed in Seoul.
According to a Bloomberg report, at this price point, SK Hynix’s issue would value the offering at $26.5 billion. This is slightly lower than the previously reported estimate of $29.4 billion, wherein the ADRs were expected to be priced at $166 each.
SK Hynix stated in its filing with the U.S. Securities and Exchange Commission (SEC) that each ADR is equivalent to one-tenth of its common share. The company’s shares closed at 2.186 million won ($1,445) apiece on Thursday on the Korea Exchange.
At $149 per ADR, the pricing of SK Hynix’s U.S. offering would be about 3.1% higher than the closing price of its shares in South Korea.
Jim Cramer Hopes SKHY Offering Is Priced At A Discount
Jim Cramer said in a post on X that he hopes the SK Hynix offering is priced at a discount, amid reports that the issue has been oversubscribed by 7x.
“The bankers are letting everyone know how oversubscribed the SK Hynix deal is. That's a dangerous game.. i hope they still price it at a little bit of discount.. Not too much to scare people but enough to keep the deal tight,” he said.
SK Hynix is expected to set the final price of its U.S. offering on Thursday, with trading expected to begin on Friday.
SKHY’s Nasdaq Debut Could Narrow Valuation Gap With MU, Says HSBC
HSBC analysts said a Nasdaq listing could boost SK Hynix's valuation by as much as 20% and help narrow its long-standing valuation gap with rival Micron Technology Inc. (MU).
Explaining its bullish stance, HSBC said it expects the company's price-to-book ratio to increase from 2.8 to 3.4 following the offering.
The firm also hiked its price target for SK Hynix to 4 million Korean won, from 2.9 million, citing the upcoming Nasdaq listing as the catalyst.
HSBC said in its note that its outlook for SK Hynix now reflects “more proactive shareholder-friendly initiatives and improved accessibility to global investors.”
SK Hynix said it plans to use the proceeds from the offering to build new production facilities in South Korea and acquire extreme ultraviolet (EUV) lithography scanners, a critical technology used to manufacture advanced semiconductors.
The Roundhill Memory ETF (DRAM) is up 141% over the past 12 months, while the iShares Semiconductor ETF (SOXX) is up 140%.
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