South Korea’s Mirae Asset Securities (006800.KS) has issued an apology to investors after failing to secure an allocation of SpaceX shares from the U.S. company’s initial public offering. The brokerage announced on Monday it would consider financial compensation for those affected by the unexpected turn of events. In a letter to clients, co-CEOs Kim Mi-seob and Heo Sun-ho stated that despite being qualified to offer SpaceX shares to Korean investors, the firm, an underwriter for the IPO, was ultimately excluded from the final allocation by the U.S. lead underwriter. SpaceX is a U.S. aerospace manufacturer and space transport services company founded by Elon Musk. It designs, manufactures, and launches advanced rockets and spacecraft. SpaceX’s stock market debut last Friday reportedly propelled the company’s value past $2 trillion.
Earlier this month, Mirae Asset collected deposits worth $500 million from investors participating in a private placement, with the offering’s two tranches reportedly selling out within minutes. The co-CEOs explained in their letter, “We made every effort until the very end to secure an allocation of shares. However, due to the discretionary final decision made by the lead underwriter in the United States, no shares were ultimately allocated to us.” They added, “We are deeply disappointed and sincerely sorry to all customers who placed their trust in Mirae Asset Securities.” The identity of the lead underwriter was not disclosed in the letter.
Investors who converted their funds into U.S. dollars for subscription deposits incurred exchange fees and absorbed the impact of recent exchange rate fluctuations, according to Korea Economic Daily TV. Meanwhile, South Korea’s Financial Supervisory Service is reportedly investigating the circumstances surrounding the allocation failure. The regulatory body plans to scrutinise investor protection measures, including whether Mirae Asset adequately informed investors about the risk of the allocation not proceeding as planned, Yonhap News Agency reported on Sunday.
