Controversy surrounding the SpaceX initial public offering (IPO), for which financial authorities repeatedly asked domestic securities and asset managers to refrain from marketing, is becoming reality. Mirae Asset Securities, the only domestic SpaceX IPO underwriter, and asset managers that rolled out aerospace-themed ETFs ramped up promotion right up to the eve of listing, but it has emerged that they were not allocated a single share, drawing public anger from investors.
Mirae Asset Securities belatedly explained, "The underwriting quantity listed in the SEC filing refers to the underwriting ratio according to participation in the syndicate and is different from the final allocation," and Korea Investment Management, which had said it would include SpaceX in its ETF at the offer price, also apologized to investors. Still, they could not avoid criticism that excessive marketing sowed confusion among investors.
Some say the case lays bare the limits of Korean financial firms in global capital markets. They are expanding in pursuit of becoming bulge-bracket investment banks (IBs), but critics say they fall short of exerting real influence on the global stage.
As SpaceX's listing plans took shape early this year, Mirae Asset Securities and major domestic asset managers actively promoted their products as channels to invest in SpaceX. In particular, Mirae Asset Securities, which invested a total of $278 million in SpaceX in 2022 and 2023, signaled early on that it intended to enable domestic investors to participate in SpaceX IPO subscriptions.
However, this was not something Mirae Asset Securities could pursue on intent alone. To take IPO subscriptions from retail investors, it must go through subscription procedures such as filing a securities registration statement with the authorities, and because this would be the first case of a public subscription for an overseas unlisted company's IPO, legal review was needed on how to apply the relevant rules.
Even so, as investors' misplaced expectations grew that they could participate in the SpaceX IPO subscription through Mirae Asset Securities, the authorities ultimately asked Mirae Asset Securities to refrain from marketing.
At the time, Deputy Vice Governor Hwang Sun-oh of the Financial Supervisory Service (FSS) said, "Mirae Asset Securities' intention to sell the SpaceX allocation domestically seems clear, but it appears a decision has not been made on how it will be sold," adding, "We asked for restraint because it appeared to be promoting before a concrete method was set and legal agreements were reached."
Afterward, Mirae Asset Securities raised orders through a private placement for professional investors instead of taking subscriptions from retail investors. The U.S. IPO subscription process differs from Korea's, and with the listing imminent, it was virtually impossible to complete domestic procedures.
In the end, however, Mirae Asset Securities had to refund in full the subscription funds raised from professional investors. Despite being the only domestic securities firm to join the SpaceX IPO underwriting syndicate, Mirae Asset Securities received no allocation.
Investor backlash is growing. In particular, investors who had waited to subscribe to the SpaceX IPO through Mirae Asset Securities not only had their funds tied up for a considerable period but also had to shoulder currency exchange costs in full.
Investors who made indirect bets on the SpaceX listing through stocks are also expected to incur losses. On the 15th, immediately after the non-allocation of IPO shares, shares of Mirae Asset Securities and Mirae Asset Venture Investment are falling. The ACE U.S. Space Tech Active ETF of Korea Investment & Securities Co.'s trust arm, which had said it would include SpaceX shares at the offer price, is also plunging.
The Financial Supervisory Service (FSS) has launched an inspection of Mirae Asset Securities to determine what happened in this case. In particular, it plans to closely examine whether investors were sufficiently informed about the peculiarities of overseas IPO subscriptions, which differ from Korea's.