SK Hynix ADRs Surge After Record $26.5 Billion US Offering

Summary

Bloomberg News US ECM Reporter Anthony Hughes discusses SK Hynix's record $26.5 billion US ADR offering, which priced at a premium to its Seoul-listed shares. He explains the company's motivation to close the valuation gap with Micron Technology and achieve a lower cost of capital. The interview also touches on Korean market volatility, the potential for further capital raises, and whether other Asian companies will follow with ADR programs.

• SK Hynix's ADR opened 14% above its $149 offering price at $170, the largest-ever US listing by a foreign company.
• The ADR trades at a 17% premium to the common stock in Seoul, partly due to exchange restrictions.
• Anthony Hughes notes the offering aimed to achieve a valuation multiple closer to Micron, which trades at a premium.
• He highlights management's balancing act between heavy capex for memory chip production and shareholder returns.
• The Korean market has been volatile but is one of the world's best performers; Hughes questions if that volatility will spill into the US-listed ADR.
• He does not expect a wave of Asian ADR programs soon, calling the deal a possible one-off reflecting strong memory chip market conditions.