Mirae Asset Securities, a South Korean brokerage and an underwriter for SpaceX's initial public offering, failed to secure any shares for its clients, despite collecting approximately $500 million in subscription orders from selected professional investors. Mirae Asset had initially expected to be allocated 2.31 million shares, part of a 555.6 million Class A share offering. The brokerage subsequently apologized to investors and announced it is considering financial compensation for those affected, refunding all subscription deposits.
The failure has prompted South Korea's Financial Supervisory Service (FSS) to expand its inspection of Mirae Asset, scrutinizing whether its internal controls were adequate and if investors were sufficiently informed about allocation risks. Critics also pointed to comments made by Mirae Asset founder Park Hyeon-joo, who in April expressed high expectations for a significant SpaceX allocation, which some believe could have misled investors. The incident has raised questions about Korean brokerages' ability to participate in major U.S. IPOs, particularly with anticipated listings from companies like Anthropic and OpenAI.
Industry sources suggest that Mirae Asset's order may have been perceived as a "soft order" by Goldman Sachs, the lead underwriter, due to concerns from Korean foreign exchange authorities regarding the impact of dollar demand on the weakening won. Regulators in Korea have been pushing to steer investors towards domestic equities, with the won weakening from the mid-1,300 range to above 1,500 against the dollar. This regulatory pressure to limit retail demand for foreign equities is seen as a contributing factor, potentially making Korean brokerages less stable counterparties in the eyes of global bookrunners. The incident follows a significant increase in U.S. equities investment by Korean retail investors, which reached $198.95 billion this year, a 22% rise from last year.
The broader implication is that policy-driven efforts to curb overseas stock investments could hinder the internationalization of Korea's capital markets and limit domestic participation in future blockbuster IPOs. While other syndicate members, such as Mizuho Securities of Japan, also saw their allocations scaled back (receiving about $2.2 billion out of a $6.2 billion application), Mirae Asset received no shares at all. This highlights concerns about Korean brokerages' standing in the global IPO market and their ability to gain credibility as underwriters.
SpaceX's IPO, which debuted on Nasdaq on June 12, raised over $85 billion. The shares were initially offered at $135 and rose to $225 before closing at $185 on Thursday following the offering.
