SK Hynix plans $28 billion stock offering
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South Korea's other massive memory chipmaker, SK Hynix, plans to sell $28 billion in stock in the U.S. later this week, even as waves of volatility batter the chip shares.
Why it matters: The offering will be a major test of whether investors are still gaga for memory chip stocks.
- SK Hynix's offering comes just a month after the market absorbed the enormous SpaceX IPO.
The big picture: SK Hynix — along with Samsung Electronics, Micron Technology and Kioxia of Japan — is among the memory chipmakers whose valuations have exploded over the last year, amid a surge in AI-related demand.
- Its stock is up over 700% in the last year in Korean currency terms, and it has risen to a market valuation of more than $1 trillion in dollars.
- Investors seem hopeful that the run can continue.
The latest: Bloomberg reports that on Wall Street, the proverbial phone is ringing off the hook as investors try to secure allocations of the roughly 178 million American depositary receipts in the company, which are valued at roughly $28 billion.
- Each ADR will be worth a tenth of a common share.
Zoom out: ADRs are essentially certificates that represent shares in foreign companies. They trade on U.S. hours, are priced in dollars and are generally easier for Americans to buy and sell compared with stocks issued on foreign exchanges.
What's next: The ADR offering is expected to price Thursday night before U.S. trading commences on Friday.
