SK Hynix hits the Nasdaq this Friday. Here's my full read

This Friday, July 10, SK Hynix ($SKHY) starts trading on the Nasdaq. The company is raising roughly $28 billion at the indicative price, with final pricing set later this week. If it lands near that level, media coverage is calling it the largest US listing ever by a foreign company, ahead of Alibaba's 2014 debut.

I own Micron ($MU), so I’m obviously paying attention here. The world's HBM share leader is about to trade in the same market, in the same currency, one ticker away from its closest competitor. After spending some time in the F-1 filing, the deposit agreement, and the Korean coverage, here is my perspective. You're reading it before Friday for a reason.

Start with the headline number, because it's widely misread. SK Hynix is issuing 17.79 million new common shares, which works out to roughly 2.5% of its 712.7 million shares outstanding. Each share gets sliced into 10 American Depositary Shares, so 177.9 million ADSs hit the Nasdaq.

Three things about that structure matter.

First, it's 100% new shares. There are zero insiders or early holders cashing out here, which is unusual for a listing this size. Every dollar raised goes into the company, and the prospectus points it at capital spending: the new Yongin fab complex, a large advanced-packaging plant in Cheongju, and the Indiana packaging site. The Korean disclosure around the deal describes a capex plan north of ₩55 trillion, and this raise funds a meaningful slice of it even though the company already sits on roughly ₩35 trillion of net cash.

Second, the dilution is real but small. Existing holders get diluted about 2.4%. In exchange, the company banks around $28 billion for a buildout it was going to fund anyway. As a shareholder trade, that's about as clean as dilution gets.

Third, and most important for anyone buying Friday: 2.5% is the size of the new issuance, and it also approximates how much of the company will live on the US line at the start. The other 97.5% keeps trading in Seoul, where SK Hynix remains listed under its home code. The Nasdaq line is a window into the company, and windows can trade at their own prices. More on that in the ADR section, because the premium-and-discount dynamic is where new buyers tend to get surprised.

The deal also comes with a 90-day lockup and a cornerstone group worth noting: Baillie Gifford, Coatue, and Situational Awareness Partners indicated interest for up to $7 billion of the offering. Those indications are non-binding, so treat them as a signal of demand rather than a guarantee.

Here's the question almost nobody asks: why 2.5%? A company with this much demand could have sold far more. The answer sits in one sentence of the F-1, and it's the most interesting sentence in the filing.

SK Hynix sits inside a Korean chaebol structure: SK Inc. controls SK Square, and SK Square holds about 20.5% of SK Hynix, making it the largest shareholder. Korea's Fair Trade Act requires a holding company like SK Square to keep at least 20% of a listed subsidiary. The filing says the offering was sized specifically so SK Square stays above that floor after the new shares land.

So the 2.5% float is a legal ceiling, and it works like a belt notch. Every new share issued pushes SK Square's percentage down toward 20%, and the offering stops exactly where the law does. If SK Hynix ever wants to issue more US shares, something has to give: SK Square buys more stock, or SK Hynix buys back and cancels shares to lift SK Square's percentage first. Korean analysts already describe that second path as the likely recurring pattern, though I'd note that's expectation rather than any company commitment.

Two takeaways from this. The scarcity of the US line is structural, written into Korean competition law rather than chosen by bankers. And SK Square itself has become the side door into this story. It trades at a discount to the value of its SK Hynix stake, and that discount has narrowed dramatically as SK Hynix re-rated: broker data cited in Korean coverage puts it around the low-40s percent by mid-June, down from the mid-60s at the end of 2024. Korean institutions capped on single-stock concentration have been buying SK Square as proxy exposure. I'm not adding SK Square here, and it lacks a US listing, but if you have access to Korean markets it belongs on the watchlist as the leveraged expression of everything below.

The rest of the article is for Insiders and covers: