GraniteShares files 2x Solidigm ETFs, joining a queue before the stock lists
GraniteShares ETF Trust on September 29 filed a daily 2x long ETF and a -2x short ETF on Solidigm Inc., after Themes and ProShares, and the prospectus says neither fund can start until the stock is listed.
Key takeaways
GraniteShares ETF Trust asked the SEC on Tuesday, September 29, to register two daily leveraged ETFs on Solidigm Inc. Solidigm has not publicly filed a registration statement. The prospectus says neither fund will start unless and until Solidigm common stock is registered under the Exchange Act and listed on a U.S. national securities exchange.
Two other issuers have already registered Solidigm funds. Themes ETF Trust filed on August 13 for three Leverage Shares funds: a daily 2x long, a daily 2x short, and one that seeks the inverse of the daily move without extra leverage. Every ticker was left blank.
ProShares Trust filed on August 17 for ProShares Ultra Solidigm and ProShares UltraShort Solidigm, one seeking twice the daily move and the other twice the inverse. Those tickers were blank too.
Registering a fund before the stock is listed is how GraniteShares has been working. On September 15 it registered 2x pairs on Stratolaunch, SB Energy and Altera, three companies that did not have listed shares. On September 21 it filed a 2x pair on Westinghouse Electric Company and left the exchange and ticker blank. On September 4 it said it had filed a 2x long and a 2x short on Anthropic, which has not completed a public offering.
The pair that did start trading is the SpaceX one. Those funds launched on June 15, once SpaceX shares were trading.
The long fund would be the GraniteShares 2x Long Solidigm Daily ETF, seeking 2 times the daily move in Solidigm common stock, before fees. The short fund, the GraniteShares 2x Short Solidigm Daily ETF, would seek -2 times that daily move. Both ticker lines are blank. So are the management fee, other expenses, the total annual expense figure and any fee waiver.
GraniteShares asked for the amendment to take effect 75 days after filing. The listing condition still decides when, and whether, either fund can start.
The prospectus says the funds are not appropriate for investors who do not intend to watch and manage their positions. Twice one day's move is not twice the stock's gain over a longer stretch, because the target resets every day.
The prospectus describes Solidigm as a maker of solid-state drives for data centers, cloud computing and artificial intelligence, based in Rancho Cordova, California, and as a current subsidiary of SK hynix, the Korean memory-chip maker. It says that in January SK hynix announced a restructuring that would move the Solidigm storage business into this new company. It also says there can be no assurance that a public offering will occur.
Reuters reported on September 25, citing three people familiar with the matter, that Solidigm is considering a U.S. listing as early as next year. Bloomberg reported the same timing separately that day.
“Solidigm is reviewing various options to strengthen its business competitiveness, but no specific plans have been confirmed at this time,” SK hynix said in a statement.
The parent already trades
Tuesday's amendment does not change the terms of a fund that already trades. GraniteShares already runs a daily pair on the parent, SK hynix, not on Solidigm.
The GraniteShares 2x Long SK Hynix Daily ETF, SKUU, seeks twice the daily move in SK hynix's Nasdaq-listed shares. The GraniteShares 2x Short SK Hynix Daily ETF, SKDD, seeks twice the inverse of that daily move. As of Wednesday, September 30, SKUU held $183.3 million and charges 1.5%. SKDD held $30.5 million and charges 2.2%.
Both began trading on July 14, four days after SK hynix's July 10 debut on Nasdaq.
The shares those funds track did move. On Monday, September 28, the Nasdaq-listed shares fell 5.0%. Bloomberg reported that SK hynix shares in Seoul fell 5% the same day, the most in two weeks, after it confirmed over the weekend that Solidigm is considering a U.S. listing as soon as next year. The Nasdaq shares rose 2.6% on Tuesday.
Monday’s selloff more than erased Friday’s bounce
BusinessKorea reported on Tuesday that shareholders worry a listing would dilute SK hynix's stake and draw investment demand away from the parent.
Whether Solidigm lists is still open. Themes, ProShares and GraniteShares have seven Solidigm funds in registration between them, and the stock those funds would track does not trade yet.
Frequently asked
When can the new Solidigm ETFs start trading?
The prospectus says neither fund will start unless and until Solidigm common stock is registered under the Exchange Act and listed on a U.S. national securities exchange.
Who else has already filed Solidigm funds?
Themes ETF Trust filed three funds on August 13 and ProShares Trust filed a 2x long and a 2x short on August 17, and every ticker was left blank.
Has Solidigm confirmed a U.S. listing?
Reuters and Bloomberg reported Solidigm is considering a U.S. listing as early as next year, and SK hynix said no specific plans have been confirmed.
Does GraniteShares already have a fund on the parent?
GraniteShares already runs a daily 2x long ETF, SKUU, and a daily 2x short ETF, SKDD, on SK hynix, not on Solidigm.
