SK Hynix's historic Nasdaq listing, which raised $26.5 billion in the largest U.S. share sale by a foreign company, was met with a sharp reversal in its home market on Monday. The chipmaker's Seoul-listed shares fell more than 10% at one point, erasing gains from a record first-day surge in its American depositary receipts (ADRs).
The ADRs, trading under the ticker SKHY, jumped 12.8% on Friday after pricing at $149 per share. The offering was more than seven times oversubscribed, surpassing Alibaba's $25 billion IPO in 2014. However, enthusiasm quickly faded in Seoul, where 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, a decline of nearly 11%, before recovering some losses.
Profit-Taking and Broader Market Pressure
Analysts largely attributed the pullback to profit-taking, as Korean investors had driven the stock up more than sixfold over the past year. The broader KOSPI index also fell as much as 2.8% on Monday, adding to the selling pressure. The move resembled a classic 'sell the news' reaction following the highly anticipated listing.
Company-specific concerns also weighed on sentiment. Investors have begun tempering expectations for second-quarter earnings, partly due to slower-than-expected shipments of the latest HBM4 products. SK Hynix's heavy reliance on high-bandwidth memory (HBM) also means it may benefit less than Samsung from rising prices for conventional DRAM.
Analyst Consensus Remains Strongly Bullish
Despite the sharp decline, Wall Street and Korean brokerages remain overwhelmingly positive on SK Hynix. The stock carries a Strong Buy consensus among 37 analysts, with 35 buy recommendations, 1 hold, and 1 sell. The average price target for the Korean shares stands at about 3.21 million won, well above Monday's intraday price.
SK Securities analyst Han Donghee called Samsung Electronics and SK Hynix 'the cheapest stocks in the age of artificial intelligence,' expecting memory-chip valuations to rise as global investors reassess the importance of DRAM and HBM to AI infrastructure. HSBC echoed this view, estimating that Micron had traded at an average premium of about 35% to SK Hynix over the past 13 years, partly due to easier U.S. access and more shareholder-friendly policies. HSBC believes the Nasdaq listing could help narrow that gap, raising its Korean-share price target to 4 million won from 2.9 million won and projecting a price-to-book multiple increase to 3.4 times from 2.8 times.
Market Context and Implications
The divergence between the ADRs and Korean shares highlights the complexities of dual listings, where premiums can fluctuate due to currency differences, market hours, and short-term demand. The broader market backdrop also remains uncertain, with investors weighing AI demand, earnings, and geopolitical tensions. For more on the market environment, see S&P 500 Nears Record: Earnings, CPI, Iran Tensions, AI Jitters in Focus.
The listing has also spurred a wave of leveraged ETF activity, raising volatility risks. For details, read SK Hynix's $26.5B US Listing Spurs Leveraged ETF Wave, Raising Volatility Risks.
While the near-term outlook faces headwinds from profit-taking and HBM4 shipment delays, the long-term thesis for SK Hynix remains intact, supported by strong AI demand and improved U.S. investor access. The stock's valuation, relative to peers like Micron, suggests further upside if the Nasdaq listing delivers on its promise of higher multiples and capital returns.
This article is for informational purposes only and does not constitute financial advice.
