invezz.com
SK Hynix’s record-breaking Wall Street debut was followed by a sharp reality check on Monday, as its Seoul-listed shares fell more than 10% at one stage.
The pullback came after the chipmaker’s new American depositary receipts surged 12.8% in their first Nasdaq session on Friday.
Importantly, the decline was in the Korean stock, not the SKHY receipts, which had yet to begin Monday’s regular US trading.
Analysts largely attributed the reversal to profit-taking, broader market weakness and cooling expectations for near-term HBM4 shipments.
SK Hynix stock: From record high to reality check
SK Hynix priced 177.9 million depositary shares at $149 each, raising about $26.5 billion in the largest US share sale by a foreign company.
The deal surpassed the $25 billion raised by Alibaba in 2014 and was more than seven times subscribed.
The receipts opened at $170 on Friday, 14% above the offer price, before closing at $168.01 for a first-day gain of 12.8%. They had climbed by as much as 19% during the session.
That enthusiasm faded quickly in Seoul. SK Hynix’s Korean shares dropped from Friday’s close of 2.18 million won to an intraday low of about 1.94 million won on Monday, a decline of almost 11%, before recovering part of the loss.
The wider KOSPI was also under pressure, falling as much as 2.8% during the morning.
Some of the moves looked like a classic “sell the news” reaction as Korean investors had already pushed the stock up more than sixfold over the previous year.
There were also company-specific concerns.
Investors have begun tempering expectations for second-quarter earnings, partly because shipments of the latest HBM4 products may not have increased as quickly as previously hoped.
SK Hynix’s greater dependence on HBM also means it could benefit less than Samsung from rising prices for conventional DRAM.
Why the drop has not shaken the analyst consensus
Wall Street and Korean brokerages remain overwhelmingly positive.
The latest market commentary shows a Strong Buy consensus among 37 analysts, with 35 buy recommendations, 1 hold, and 1 sell.
The average target for the Korean shares stands at about 3.21 million won, substantially above Monday’s intraday price.
The bullish argument begins with valuation.
In comments reported by Asiae, SK Securities analyst Han Donghee called Samsung Electronics and SK Hynix “the cheapest stocks in the age of artificial intelligence”.
He expects memory-chip valuations to rise as global investors reassess the importance of DRAM and HBM to AI infrastructure.
HSBC made a similar argument in a research note.
The bank estimated that Micron had traded at an average premium of about 35% to SK Hynix over the previous 13 years, partly because US investors could access Micron more easily and because the company followed more shareholder-friendly policies.
HSBC believes the Nasdaq listing could help narrow that gap by improving accessibility and encouraging stronger capital returns.
It raised its Korean-share price target to 4 million won from 2.9 million won and projected that SK Hynix’s price-to-book multiple could rise to 3.4 times from 2.8 times.
Friday’s jump followed by Monday’s reversal shows that the two listings may periodically trade at different premiums as investors adjust for currencies, market hours and short-term demand.