Morgan Stanley Not Selected as Sole Lead Underwriter for SK Hynix's ADR Listing
Morgan Stanley Loses Out on SK Hynix's $26.5 Billion ADR Underwriting
Morgan Stanley was not selected as the sole lead underwriter for SK Hynix's American Depositary Receipt (ADR) listing, which has a scale of approximately $26.5 billion, making it the largest IPO by foreign capital in the U.S.
The final underwriting syndicate consists of Bank of America, Citigroup, Goldman Sachs, and JPMorgan Chase, with estimated commissions of about $130 million at a 0.5% fee rate.
The loss is event-driven, leading to a redistribution of investment bank shares, with funds and reputations flowing to the selected banks, benefiting Bank of America, Citigroup, Goldman Sachs, and JPMorgan Chase, while putting pressure on Morgan Stanley's related business in Korea.
Source: Public Information
ABAB AI Insight
Morgan Stanley has recently led major tech deals for companies like SpaceX and Anthropic, and was seen as a potential underwriter for OpenAI, but is absent from this largest ADR deal in Asia for SK Hynix.
In terms of capital pathways, the selected investment banks share the fee pool through global coordination and depositary responsibilities, with resources skewed towards institutions that have closer relationships with the issuer, motivated by the aim to secure long-term Asian tech clients and subsequent business.
Similar cases have shown that some investment banks have lost underwriting opportunities due to the stance of their research reports, and the current environment is characterized by intense competition for cross-border IPO underwriting amid the AI chip boom.
This essentially reflects capital concentration, with the mechanism being that issuers prefer to choose investment banks whose research positions align with their own narrative to mitigate public opinion and valuation risks during the listing process.
ABAB News · Cognitive Law
The stance of research reports influences underwriting opportunities
Missing out on major deals is the biggest reputational cost for investment banks
Client relationships ultimately determine fee distribution