PiCK
SK Hynix Abruptly Withdraws Solidigm US IPO Plan, Accepting Shareholder Views
Summary
- SK Hynix said it has decided to withdraw the planned U.S. Nasdaq initial public offering (IPO) of Solidigm, its indirect subsidiary.
- It said work on the pre-IPO share sale that had been advancing alongside the listing has also been halted following the decision to scrap Solidigm’s U.S. listing.
- SK Hynix said it will formally withdraw the Solidigm listing plan after accepting shareholder concerns over equity-value dilution and damage to shareholder value.
Forecast Trend Report by Period
Public backlash grows over dual-listing concerns
Capital-market conditions and a weak domestic stock market also weighed
SK Hynix has decided to withdraw the planned Nasdaq initial public offering of its indirect subsidiary Solidigm. The move appears to reflect a broad review of intensifying shareholder backlash, capital-market conditions and the company’s stock-price performance after news of the listing plan emerged.
According to industry officials on October 22, SK Hynix has concluded it will scrap Solidigm’s U.S. listing and plans to announce the decision formally soon. Work on a pre-IPO share sale tied to the listing has also been halted.
Strong opposition from SK Hynix shareholders and weakness in the stock are seen as decisive factors behind the reversal. Shareholders had worried that listing Solidigm separately would trigger a dual-listing discount and erode SK Hynix’s corporate value. They also opposed the plan because any new share issuance would dilute existing holdings and shift Solidigm’s net income and future profits away from SK Hynix shareholders to new investors.
Solidigm carries significant weight within the group. It accounts for 12.9% of SK Hynix’s total corporate value. AI Company, its parent company, posted net profit of 5.84 trillion won ($4.21 billion) in the first half of this year, equal to 4.3% of SK Hynix’s total, while its revenue contribution was 9.3%, close to 10%.
Solidigm was created after SK Hynix acquired Intel’s NAND flash business in 2021. AI Company, a U.S. intermediate holding company, owns 100% of the stake. Earlier this year, SK Hynix set up AI Company in January, placed a new Solidigm entity under it as part of a governance restructuring, and injected as much as $10 billion in capital.
With SK Hynix deciding to formally withdraw the Solidigm listing plan after accepting shareholder sentiment, market controversy over equity-value dilution and damage to shareholder value is expected to ease for now.
Kim Chae-yeon, Hankyung.com reporter why29@hankyung.com
Roh Yoo-jung, Hankyung.com reporter yjroh@hankyung.com
Korea Economic Daily
hankyung@bloomingbit.ioThe Korea Economic Daily Global is a digital media where latest news on Korean companies, industries, and financial markets.