Company abandons US NASDAQ initial public offering

Shareholder concerns over corporate value erosion accepted

Decision comes four days after Financial Supervisory Service chief's 'dual listing' warning

SK hynix has decided to withdraw its plan to list US subsidiary Solidigm on NASDAQ, ending an initial public offering push that had drawn criticism over dual-listing concerns.

SK hynix announced the decision to cancel the Solidigm listing in a regulatory filing Friday morning. The pre-IPO process — a round of pre-listing equity investment that had been pursued alongside the IPO — was also halted.

"Solidigm has been reviewing various financing options to expand production capacity and strengthen competitiveness, but has decided to halt its pre-IPO and IPO review after comprehensively considering capital market conditions and other factors," SK hynix said.

The Solidigm campus in Rancho Cordova, Sacramento County, California. [Solidigm website]
The Solidigm campus in Rancho Cordova, Sacramento County, California. [Solidigm website]

The decision came four days after Financial Supervisory Service chief Lee Chan-jin told the National Assembly's Political Affairs Committee during a national audit Monday that both the Financial Services Commission and the FSS had concluded the plan would constitute a dual-listing violation.

SK hynix had until recently been pressing ahead with the NASDAQ listing, having appointed Goldman Sachs and Morgan Stanley as lead underwriters for the IPO.

Solidigm was established after SK hynix acquired Intel's NAND flash business. The company had been embroiled in a five-layer dual-listing controversy stemming from its ownership chain: SK Group — SK Square — SK hynix — an AI company — Solidigm.

Analysts say SK hynix would have found it difficult to push ahead with the listing amid mounting shareholder backlash, a falling share price, and the FSS chief's public intervention that in effect put the brakes on the plan.

Shareholders had warned that listing Solidigm would erode SK hynix's corporate value through dual listing.

The Financial Services Commission and the Korea Exchange have been enforcing guidelines since Aug. 3 that in principle prohibit dual listings to protect shareholders, with exceptions allowed only when a parent company's board has fulfilled its duty of loyalty to shareholders. The guidelines apply equally when a subsidiary is dual-listed on an overseas exchange.


joze@heraldcorp.com