SEOUL — South Korean brokerage Mirae Asset Securities issued a public apology to its clients on Monday after the firm was shut out of SpaceX’s historic stock market debut, leaving hundreds of millions of dollars in investor orders unfulfilled.
In a letter to clients that was reviewed by Reuters, Mirae Asset Securities co-CEOs Kim Mi-seob and Heo Sun-ho explained that while the brokerage had been qualified to offer SpaceX shares to South Korean investors and had served as one of the IPO’s underwriters, the U.S. lead underwriter ultimately chose not to include Mirae in the final share distribution.
SpaceX made its stock market debut on Friday, sending the company’s total valuation beyond $2 trillion and making founder Elon Musk the world’s first trillionaire.
Earlier this month, Mirae Asset had gathered $500 million worth of orders from investors eager to get in on the SpaceX offering. According to someone with knowledge of the situation, both portions of the offering sold out within minutes of becoming available.
“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,” the letter stated. The firm added that it is now looking into the circumstances behind that decision.
“We are deeply disappointed and sincerely sorry to all customers who placed their trust in Mirae Asset Securities and participated in this offering,” the letter continued.
The letter did not name the lead underwriter responsible for the allocation decision. Several major banks involved in the SpaceX IPO — including Morgan Stanley, Bank of America, and JPMorgan Chase — did not respond to requests for comment outside of Asian business hours. Goldman Sachs and Citigroup both declined to comment.
According to Korea Economic Daily TV, investors who had already converted their money into U.S. dollars to cover subscription deposits were still on the hook for foreign exchange fees and had to absorb losses tied to recent currency fluctuations.
South Korea’s Financial Supervisory Service opened a formal inspection of Mirae Asset on June 8, looking into whether the brokerage adequately warned investors about the possibility that a share allocation might not come through. A regulator official confirmed the inspection on Tuesday but asked not to be named, citing the confidential nature of the matter.
Mirae Asset declined to comment on the situation.
