▲ SpaceX lists on Nasdaq
Controversy continues to brew over the sudden reduction of the so-called "Korea tranche" allocation to zero during the Nasdaq listing process of SpaceX, which marked the largest-ever initial public offering (IPO).
According to the financial investment industry on Monday (June 15), Goldman Sachs, the lead underwriter for the SpaceX IPO, completely cut the allocation for South Korean investors during the final allotment process ahead of the listing on June 12.
Initially, the prospectus submitted to the U.S. Securities and Exchange Commission (SEC) stated that Mirae Asset Securities, which participated in the underwriting syndicate alongside some 20 global investment banks (IBs), would underwrite 2,314,815 Class A common shares.
However, Goldman Sachs cut the allocation for South Korean investors just before the listing, citing the need to reallocate shares due to explosive demand, particularly from institutional investors.
The notification of the cut reportedly consisted of nothing more than a single, unilaterally sent email stating that the allocated volume was "0".
Faced with this sudden turn of events, Mirae Asset Securities went into emergency mode, scrambling to fully refund the subscription deposits paid by domestic retail and corporate professional investors, as well as institutional investors, who had participated in the earlier SpaceX IPO subscription.
Because notifications were sent individually, it is difficult to verify the exact volume received by other IBs in the underwriting syndicate, with only a few exceptions.
However, Japan's Mizuho Securities, which was originally scheduled to be allocated 2,314,815 shares—the same as Mirae Asset Securities—reportedly received more than seven times that amount. Furthermore, Mirae Asset is understood to be the only IB in the underwriting syndicate whose allocation was cut to zero.
An industry insider said, "It is a difficult decision to understand, given that the South Korean investors' share was completely eliminated at the final stage even though the underwriting volume had been explicitly stated. Consequently, this cannot help but be seen as a case where a major global IB sidelined the Korean market and its investors."
Another source said, "Mirae Asset Group is one of the few financial firms in South Korea that has participated in investing in SpaceX since its early stages. Considering the long-standing cooperative relationship between the two companies, this complete lack of allocation is highly unusual."
In contrast to the festive mood among global investors celebrating the SpaceX listing, Mirae Asset Securities now faces an inspection by the Financial Supervisory Service (FSS).
The FSS plans to focus its investigation on whether Mirae Asset Securities sufficiently informed investors of potential investment risks beforehand, such as the possibility of the allocation falling through, and the potential losses for clients of asset management companies that had planned to include the SpaceX IPO shares secured through Mirae Asset in related exchange-traded funds (ETFs).
Amid growing controversy over whether this constitutes a de facto "Korea passing," some in the industry interpret that Goldman Sachs may have prioritized global institutional investors with a high likelihood of long-term holding, rather than just looking at the subscription size.
Barriers arising from differences between the public offering systems of South Korea and the United States may also have played a role, as plans to allocate SpaceX IPO shares to domestic investors ultimately fell through.
Under the Capital Markets Act in South Korea, conducting a public offering subscription for general retail investors requires procedures such as submitting a registration statement to financial authorities, which typically takes more than three weeks.
However, because SpaceX submitted its registration statement just a week before listing in accordance with U.S. regulations, Mirae Asset Securities pivoted from a public offering for retail investors to a private placement targeting professional investors. Some suggest this shift may have provided a pretext for the "zero-share allocation."
An IB industry source who requested anonymity said, "It is understood that communication with Citigroup Global Markets Korea Securities, the retail underwriter, was not smooth during this process, which may have caused issues."
Some also analyze that even if the issue stemmed from differences in IPO regulations between the two countries, the fact that the procedures were carried out without prior approval from financial authorities may have served as a vulnerability.
An industry expert well-versed in global IPOs said, "In U.S. IPOs, it is common for allocations to be reduced or eliminated when there is oversubscription. We must also consider that South Korea's structure—due to disclosure schedules, registration procedures, and market infrastructure—makes it difficult to supply foreign IPOs to domestic investors."
※ Please note: This article was translated by AI and may contain errors.