1. SK Hynix's listing this time is not a typical technical listing, but a massive US ADR offering: 17.79 million new shares will be issued, corresponding to 177.9 million ADRs. Each ADR represents 1/10 of the common stock, raising approximately $28 billion. Trading is expected to begin on Nasdaq on July 10th.
2. For US long-term funds, hedge funds, and AI-themed funds, the ADR trading hours, settlement, custody, and margin trading systems are more convenient. They can directly buy Nasdaq ADRs, eliminating the need to buy the underlying stock through the Korean market.
3. The subscription has been extremely popular, with many well-known institutions planning to participate. Some US institutions have orders exceeding $200 million to $1 billion. Therefore, Hynix ADRs are expected to have a premium in the short term.
4. If institutions receive ADR allocations, they may first short the underlying stock to hedge and lock in risk. Hong Kong stock leveraged funds are already prone to selling, portfolio adjustments, and rebalancing pressures when their underlying stocks fluctuate wildly, and they also incur daily losses from portfolio adjustments and financing. ADR trading, on the other hand, does not have these additional costs, making it more advantageous. However, once the fund relocation is complete, Hynix is expected to return to its fundamentals.
