Wall Street also scores a 'jackpot' from SK hynix listing...fees alone expected to reach $140 million

[Financial News, New York = Lee Byung-chul] SK hynix's Nasdaq listing in the United States is expected to go down as a record-breaking initial public offering (IPO), and Wall Street investment banks that are underwriting the deal are also expected to collect more than $140 million in fees. The roughly $28 billion American Depositary Receipt (ADR) listing, driven by the AI memory boom, is set to become a major revenue source for Wall Street as well.
According to the Financial Times (FT) on the 9th local time, the total fees to be received by the underwriters of SK hynix's listing, including Goldman Sachs and Citigroup, are expected to exceed $140 million. The fees consist of 0.5% of the total offering amount and an incentive fee paid separately by SK hynix.
The lead underwriters are BofA, Citigroup, Goldman Sachs, and JPMorgan Chase. They are handling SK hynix's Nasdaq ADR listing in the United States, and the fundraising size based on the securities filing is estimated at about $28 billion. SK hynix is scheduled to begin trading on Nasdaq on the 10th.
The listing is being pursued against the backdrop of surging demand for memory semiconductors as investment in AI data centers expands. SK hynix, a key supplier of high-bandwidth memory (HBM) to NVIDIA, has seen its market capitalization rise above $1 trillion on the back of growth in the AI semiconductor market.
If the offering is completed as planned, it will become a mega-sized listing. However, since SK hynix's share price has edged lower after the recent filing, there is also a possibility that the final fundraising amount could be somewhat reduced.
Wall Street expects the deal to become one of the most lucrative listings of an Asian company. According to market research firm Dealogic, the underwriters of Alibaba Group's 2014 IPO, which raised $25 billion, received about $300 million in fees. By contrast, Wall Street investment banks reportedly collected more than $500 million in fees from SpaceX's listing last month, which raised $85.6 billion.
The underwriting fee rate for this deal is 0.5% of the offering amount, which is relatively low for a large IPO. The FT said the fact that SK hynix is already listed on the Korea Exchange and the sheer size of the transaction helped push the fee rate down.
Meanwhile, Citigroup will not only serve as an underwriter for the listing but also act as the depositary bank for SK hynix's ADRs. As a result, it is expected to earn additional fee income from conversion services between the ADRs and the Korea-listed shares, as well as dividend payments.




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