Photo: SK Hynix logos decorate New York's Times Square. Credit: SK Hynix.
On July 10, the semiconductor giant SK Hynix SK 하이닉스 offered its American depository receipt (ADR) on NASDAQ with the ticker symbol SKHY, at USD 149 per share. Each ADR is equivalent to one-tenth share of SK Hynix’s common stock listed on KRX, South Korea’s main stock exchange. For the ADR offering, SK Hynix issued 17.8m new shares, accounting for 2.5% of total shares.
The ADR offering totaled USD 26.5b - the largest initial public offering of a foreign company in the United States since Alibaba’s 2014 IPO, and a big enough occasion for SK Group chairman Choi Tae-won 최태원 to ring the opening bell at the NASDAQ exchange in New York. On the first day of trading, the ADR jumped by 13% to close at USD 168 per share, or 16% higher than the price of the equivalent number of common shares traded on KRX due to the easy accessibility of the US market.
SK Hynix’s ADR offering was so large that it visibly moved the USD-KRW exchange rate, which had been showing record weakness for the KRW. (See previous coverage, “Exchange Rate Goes Haywire.”) On July 14, the exchange rate was USD 1 to KRW 1489.8, a two-month high for the KRW. Although SK Hynix has yet to convert its new USD earnings to KRW, the expectation that the company will use the new capital to make investments in South Korea has pushed KRW to rise preemptively.
