SK Hynix Inc. could price its U.S. offering at $149 per American Depositary Receipt, valuing the issue at $26.5 billion according to a Bloomberg report. This pricing is slightly lower than the previously reported estimate of $29.4 billion, where ADRs were expected to be priced at $166 each, amid recent volatility in the company's shares listed in Seoul. The company is expected to set the final price on Thursday, with trading anticipated to begin on Friday. At $149 per ADR, the pricing would represent approximately 3.1% above the closing price of SK Hynix's shares in South Korea on the Korea Exchange, where shares closed at 2.186 million won ($1,445) apiece on Thursday. Each ADR is equivalent to one-tenth of a common share according to the company's SEC filing.
Jim Cramer Cautions on SK Hynix Offering Oversubscription
Jim Cramer stated 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.
HSBC Analysts Project Valuation Boost from Nasdaq Listing
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. The firm expects the company's price-to-book ratio to increase from 2.8 to 3.4 following the offering. HSBC 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 Plans Production Facility Investment with Offering Proceeds
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.
FAQ
What is the expected pricing for SK Hynix's U.S. offering?
SK Hynix could price its U.S. offering at $149 per American Depositary Receipt, valuing the issue at $26.5 billion according to a Bloomberg report. This is lower than the previously reported estimate of $166 per ADR.
When will SK Hynix finalize the pricing and begin trading?
SK Hynix is expected to set the final price of its U.S. offering on Thursday, with trading anticipated to begin on Friday.
How does the U.S. offering price compare to SK Hynix's Korea Exchange price?
At $149 per ADR, the pricing would be approximately 3.1% higher than the closing price of SK Hynix's shares in South Korea, where shares closed at 2.186 million won ($1,445) apiece on Thursday. Each ADR represents one-tenth of a common share.
