Mirae Asset apologizes to investors over failed SpaceX IP…

Mirae Asset Securities, a South Korean brokerage, apologized to its investors for not securing any shares in SpaceX's IPO, despite being qualified to offer them. The co-CEOs stated that they are considering financial compensation for affected clients since they were excluded from the final allocation by the U.S. lead underwriter, which remains unidentified. The IPO propelled SpaceX's valuation past $2 trillion, making Elon Musk the world's first trillionaire. The brokerage had collected $500 million in deposits from investors but faced scrutiny from South Korea's Financial Supervisory Service regarding investor protection measures. Mirae Asset expressed disappointment over the situation and is investigating the allocation failure.

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SEOUL, June 15 (Reuters) - South Korea's Mirae Asset Securities (006800.KS), opens new tab apologized to investors on Monday for failing to secure an allocation of SpaceX shares from the U.S. company’s initial public offering, adding that it would consider financial compensation for those affected.

In a ‌letter to clients reviewed by Reuters, Mirae Asset Securities co-CEOs Kim Mi-seob and Heo Sun-ho said that despite being qualified to offer SpaceX shares to Korean investors, the brokerage, one of the underwriters for the SpaceX IPO, was ultimately left out of the final allocation by the U.S. lead underwriter.

On Friday, SpaceX's stock market debut sent the ⁠company's value past $2 trillion, turning Elon Musk into the world's first trillionaire.

Earlier this month, the brokerage collected deposits worth $500 million from investors participating in a private placement. The offering's two tranches sold out within a few minutes, according to a person familiar with the matter.

"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," according to the letter. It said it was investigating the circumstances ‌surrounding ⁠the 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 did not disclose the identity of the lead underwriter. Banks involved in the SpaceX IPO, including Goldman Sachs (GS.N), opens new tab, Morgan Stanley (MS.N), opens new tab, Bank of America (BAC.N), opens new tab and JPMorgan ⁠Chase (JPM.N), opens new tab, did not immediately respond to requests for comment outside of Asian working hours, while Citigroup (C.N), opens new tab declined to comment.

Investors who exchanged their funds into U.S. dollars to pay for the subscription deposits still had ⁠to cover exchange fees and absorb the impact of recent exchange rate fluctuations, according to Korea Economic Daily TV.

Yonhap News Agency reported on Sunday that South Korea's Financial Supervisory Service ⁠was investigating the circumstances surrounding the allocation failure. It was planning to scrutinize investor protection measures, including whether Mirae Asset sufficiently informed investors about the risk of the allocation falling through, the report said.

Reporting by Hyunjoo Jin and Yatoultra Ngui Editing by Tomasz Janowski

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Mirae Asset apologizes to investors over failed SpaceX IPO allocation

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