South Korea watchdog probes brokerage over failed SpaceX IPO share allocation
The move comes after Mirae Asset failed to secure SpaceX shares despite accepting investor deposits
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[SEOUL] South Korea’s financial watchdog has expanded an inspection of Mirae Asset Securities to examine the brokerage’s failure to secure an allocation of SpaceX shares in the company’s initial public offering, according to people familiar with the matter.
As in most Asian markets, retail investors in South Korea were shut out of the blockbuster listing of Space Exploration Technologies, as the company is formally known. Mirae Asset, one of the IPO’s underwriters, offered access to the stock through a private placement to registered accredited investors.
The Financial Supervisory Service had already begun inspecting the brokerage last week to determine whether investors who signed up for the placement met eligibility requirements for registered professional investors, the people said, asking not to be identified because the matter is not public.
The regulator has since widened the scope of the inspection after Mirae failed to receive any allocation of SpaceX shares in the IPO despite accepting deposits from investors participating in the placement, the people said.
Demand for the offering was intense. The first US$300 million tranche of Mirae’s placement sold out in one minute, according to Yonhap Infomax. The brokerage had planned to open subscriptions for a second US$200 million tranche on Jun 8, the report said.
Mirae Asset Securities declined to comment.
The Korea Times reported on Sunday (Jun 14) that regulators were planning to examine the circumstances surrounding Mirae Asset’s failure to secure an allocation of SpaceX shares.
The failed allocation also disrupted plans by some local asset managers to add SpaceX shares through the offering. Korea Investment Management said it purchased SpaceX shares after the stock began trading on Friday and added them to its ACE US Space Tech Active exchange-traded fund. SpaceX accounts for about 26 per cent of the ETF, which has 312 billion won (S$264 million) in assets, according to the fund’s website.
SpaceX shares opened at US$150 on Friday, above the IPO price of US$135. The stock rallied more than 30 per cent to an intraday high before paring gains to close up 19 per cent at US$160.95. BLOOMBERG
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