While the South Korean market is undergoing a sharp correction, demand for SK Hynix's $28 billion US listing has exceeded supply by more than seven times. This is one of the largest placements of 2026, second only to SpaceX's $85.7 billion IPO in June.
Major institutional investors, including Baillie Gifford, Coatue Management, and Situational Awareness Partners, have submitted bids, ready to invest a total of up to $7 billion. This interest persists amid an extremely volatile week for the Korean market: the KOSPI index briefly plunged more than 20% from its peak this week, entering "bear" market territory.
The decline in shares of SK Hynix and Samsung Electronics, which now account for about half of KOSPI's market capitalization (compared to only 25% a year ago), dragged down the entire index. However, by Thursday's opening, KOSPI had recovered nearly 4%, surpassing an important threshold.
Arbitrage Strategy and Bet on Valuation Gap
The underwriters of the deal — Bank of America, Citigroup, Goldman Sachs, and JPMorgan Chase — will determine the final price after the close of trading in Korea, with the results of share allocation announced Thursday afternoon US time. Notably, UBS recommended clients buy SK Hynix American depositary receipts and sell shares on the Korean market, betting on a higher valuation of the securities in the US.
Pre-market trading on Nasdaq under the ticker SKHYV will begin on Friday in when-issued mode, while main trading under the permanent ticker SKHY will start on July 13.
The concentration of bids in the hands of a few large funds amplifies both the rise and fall of quotations. There is no consensus even on Wall Street: JPMorgan and Morgan Stanley are making opposing bets on future demand for AI chips.
Commentary from Cryptalist analyst: SK Hynix's US listing is not just a financial transaction but a litmus test for the entire semiconductor sector. The anomalous 7x demand amid a technical correction in Korea suggests that global investors are making a long-term bet on the AI chip demand cycle, ignoring local risks. However, the concentration of capital in a few hands creates systemic risk: if the "bear" trend in Korea intensifies, US investors could find themselves trapped in a valuation gap.