SK Hynix Reportedly Scraps Solidigm's Nasdaq IPO After Shareholder Backlash
SK Hynix has reportedly decided to abandon the planned Nasdaq IPO of its Solidigm subsidiary after strong shareholder opposition over valuation damage and dilution, according to Korea Economic Daily, and work on a pre-IPO funding round has also been halted, with a formal announcement expected soon.
SK Hynix has reportedly decided to cancel the planned U.S. Nasdaq IPO of its subsidiary Solidigm after strong shareholder opposition, according to Korea Economic Daily, with an official announcement expected soon. Investors had warned that listing Solidigm separately could damage SK Hynix's valuation and dilute existing shareholders' economic interests. The report also said plans to raise private investment in Solidigm ahead of the listing have effectively been suspended. SK Hynix has not confirmed the decision.
What was reported
| Item | Detail |
|---|---|
| Decision | SK Hynix withdraws the planned Nasdaq listing of Solidigm, its indirect subsidiary |
| Announcement | Formal announcement expected soon; no date given |
| Shareholder concerns | A dual-listing discount eroding SK Hynix's value; dilution from new share issuance; Solidigm profits shifting to new investors |
| Pre-IPO funding | Work on a pre-IPO share sale has been halted; no size or pricing reported |
| Other factors cited | Weakness in SK Hynix shares, capital-market conditions and a soft domestic stock market |
Korea Economic Daily, as republished by Bloomingbit, said Solidigm accounts for 12.9% of SK Hynix's total corporate value. Its parent, AI Company, owns 100% of Solidigm and posted first-half net profit of 5.84 trillion won ($4.21 billion), 4.3% of SK Hynix's total, on revenue equal to 9.3% of SK Hynix's. SK Hynix set up AI Company in January, placed the new Solidigm entity under it and injected up to $10 billion in capital. Solidigm was created after SK Hynix acquired Intel's NAND flash business in 2021.
How the pressure built
| Date | Development |
|---|---|
| August | The Korea Corporate Governance Forum urged SK Hynix to cancel the plan; SK Hynix said no decision had been made. A pre-IPO fundraising process reportedly began. |
| Sept. 28 | After weekend reports of a listing as early as 2027 at a valuation of up to $100 billion, SK Hynix fell as much as 5.1%, SK Square 7.1% and the Kospi 2.7%, according to Investing.com. |
| Oct. 5 | Minority shareholder platform Act said it would ask the Korea Exchange whether duplicate-listing guidelines could apply, according to Korea JoongAng Daily; the paper put a possible listing valuation at up to $150 billion. |
| Oct. 19–20 | Financial Supervisory Service Governor Lee Chan-jin told a National Assembly audit that regulators view the listing as conflicting with duplicate-listing rules. SK Hynix fell as much as 4.74% to 1,216,500 won, SK Innovation 8.47%, SK Inc. 6.99% and SK Square 5.51%, according to BigGo Finance. |
| Oct. 21 | SK Hynix said it had made no final decision and that "all decisions are guided by the goal of creating long-term shareholder value," the Korea Times reported. |
| Oct. 22 | Korea Economic Daily reports the IPO has been scrapped. |
The Korea Exchange has no direct authority over a U.S. listing, but said SK Hynix would be subject to dual-listing rules and would need to consult or obtain approval from its shareholders, according to the Korea Times. Lawmaker Ahn Cheol-soo of the People Power Party had urged the government to stop the listing, arguing it could dilute SK Hynix shareholders' indirect stake.
Why it matters
SK Hynix has argued a listing could help it capture the value of its Solidigm stake and fund new production and research, and an industry official cited by the Korea Times noted potential investment and expanded U.S. manufacturing. Shareholders saw a second listed layer in the ownership chain of SK, SK Square and SK Hynix as a way to leak value. Korea JoongAng Daily said SK Hynix, which has reported record earnings for five consecutive quarters, has announced a 40 trillion won share buyback and cancellation plan and said it will pursue more shareholder returns when it reports third-quarter results.
BigGo Finance noted that if outside fundraising is blocked, Solidigm would need to find growth funds within the group, and said any recovery in sentiment would depend on SK explaining the structure and timetable.
Sources: Korea Economic Daily (Oct. 22), as republished by Bloomingbit; Korea Times (Oct. 21); Korea JoongAng Daily (Oct. 5); Investing.com (Sept. 28); BigGo Finance (Oct. 20). The cancellation has not been confirmed by SK Hynix. This is informational, not a recommendation to buy or sell.
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