The question of whether Solidigm, a grand-subsidiary of SK Hynix, would proceed with an initial public offering (IPO) has escalated into a political issue, and the listing review was suspended before it could even receive market evaluation. This followed a flood of demands from the political sphere to halt or completely reexamine the listing. It also appears that negative public opinion, driven by the continued weakness in SK Hynix’s stock price, played a role.
According to industry sources on Sunday, claims have been made one after another across the political spectrum, regardless of party affiliation, arguing that the Solidigm IPO is a case of duplicate listing that dilutes shareholder value and should be stopped.
During the national audit by the Political Affairs Committee of the National Assembly, People Power Party (PPP) lawmaker Park Seong-hoon said it was “a typical example of the chronic duplicate listing problem in the Korean stock market extending overseas.”
Democratic Party of Korea lawmaker Lee Kang-il said, “The government created a guideline prohibiting duplicate listings as a principle, but there is an issue of whether this is circumventing that rule, and it is not easy to block it at the listing stage,” adding that institutional gaps need to be addressed.
PPP's Rep. Ahn Cheol-soo posted on social media on the 19th, calling it a “shucking company” tactic designed to allow SK Group’s chairman and affiliates to misappropriate the interests of Hynix shareholders, and urged President Lee Jae Myung to “deploy all public means to block this listing.”
Kim Han-gyu, a Democratic Party lawmaker on the Legislation and Judiciary Committee, also stated that it should be examined whether legal liability could be imposed on the board of directors if shareholder value is eroded by the Solidigm listing.
Financial regulators also expressed their position that the case constitutes a duplicate listing. FSS Governor Lee Chan-jin said during the national audit, “Both the Financial Services Commission and we have determined that it violates the duplicate listing guideline.”
Financial Services Commission Chairman Lee Eog-weon stated, “It falls under the scope of application of the duplicate listing guideline,” adding, “The boards of directors of parent company SK Hynix and SK Square must fulfill the five major obligations based on the duty of loyalty to shareholders.”
The weakness in SK Hynix’s stock price following news of the Solidigm IPO plan also weighed on the push for the listing. Since the 1st, when rumors of the IPO spread, SK Hynix’s stock price has fallen by 33.28%, with concentrated net selling by foreign investors.
During this period, cumulative net selling by foreign investors in SK Hynix reached 750 billion won. Consequently, the announcement suspending the review of the Solidigm IPO acted as a positive factor. On the 23rd, SK Hynix closed up 3.27% from the previous trading day.
There are also views that this will have a positive impact on improving investor sentiment, given that Solidigm’s duplicate listing had been cited as one of the reasons for the recent sharp decline in SK Hynix’s stock price.
This is because, with the IPO halted, existing SK Hynix shareholders can fully secure the benefits from Solidigm’s growth in the enterprise solid-state drive (eSSD) market for AI data centers.
Choi Bo-young, a researcher at Kyobo Securities, said, “Domestic and foreign institutional investors had hesitated to buy SK Hynix due to the Solidigm IPO issue. Being able to focus more on performance is positive for SK Hynix.”
in STOCK
