SK hynix's Nasdaq premium over Seoul is down to 36%; its chairman has floated more ADR sales
SK hynix's Nasdaq ADR closed 40.42% above its Seoul common on October 9; seven straight New York declines have since narrowed the premium to about 36%. The lockup is gone, the Seoul buyback ends around October 20, and the October 27 earnings call may say whether the company issues more ADRs into the gap.
Vincent Jiang · 3 min read
One dividend, two prices, both falling
SK hynix−5.26% — SK hynix, down 5.26 percent today, the dominant supplier of the high-bandwidth memory stacked beside AI accelerators 1, sells the same claim on its cash flows in two markets at two prices. Its Nasdaq American depositary receipts, US-traded certificates each worth a tenth of a Seoul common share 23, closed October 9 at $169.03, about 225,384 won: a 40.42% premium to the common's 1,605,000 won close in Seoul 4.
The gap has narrowed since, because New York fell faster. The ADR has closed lower seven sessions straight, Seoul six 5, and by October 13 the premium was about 36%, the ADR near $146 6. Korean retail has paid it too, net buying the New York line since the July 10 debut despite higher capital-gains taxes at home 7.
New York gave back the rally: the ADR is down from $169 to $146 in four sessions
Data
| ADR price | |
|---|---|
| 10 Jul issue | $149 |
| 9 Oct | $169.03 |
| 13 Oct | $146 |
The company holds the valve
The July listing priced 177.9 million ADRs at $149 and raised about $26.5 billion on what London Daily called massive investor demand 28; Seoul's foreign-exchange stabilization fund absorbed roughly $20 billion of the repatriated dollars 2. The 90-day lockup expired on October 7, per SEC filings, freeing directors and executives at SK hynix and SK Square to sell and making a fresh issuance legally possible 4.
Chey Tae-won, chairman of SK Group, told Bloomberg after the listing that more ADRs could come if investor returns stay strong and the share price stable 4. Issue into the premium and cancel Seoul stock, and the buyers who paid the premium fund the company at premium prices while Seoul's float shrinks. The Seoul buyback is about 90% done and wraps around October 20; watchers expect the October 27 earnings call to bring guidance on expanding the ADR program plus more buybacks and cancellations 43.
Seoul's slide built the premium: the common is down 23% from its early-October peak
Data
| Seoul common close | |
|---|---|
| 2 Sep | ₩1,613k |
| early Oct | ₩1,841k |
| 9 Oct | ₩1,605k |
| mid-Oct | ₩1,418k |
Built in Seoul, closing in New York
The gap had widened because Seoul slid while the ADR held near its $170 debut price 4; six straight Seoul declines then took the common down 23% from its early-October close, to 1,418,000 won 5. The triggers were two-sided. China's ChangXin Memory flagged a denser server-memory cell for launch by year end 9. A Korean report said SK hynix's HBM4 packaging-tool orders may slip to 2027, which a company official disputes 510.
The $26.5 billion funds the roadmap: HBM4E, custom HBM, and high-bandwidth flash at roughly 10 times HBM capacity on about half the bandwidth, on chief development officer Ahn Hyun's projection that AI infrastructure grows nearly 20-fold by 2030 1. Second-quarter revenue was 79.32 trillion won, up 256.8% from a year earlier 3.
The premium is the trade
Short sellers are already positioned. One thesis on Seeking Alpha, a stock-analysis site, is short the ADR and targets the premium compressing to 10%, arguing the near-complete buyback leaves little to support it 6. Against it stand a scarce ADR float 6 and a 16-analyst consensus target of $253 3.
Global funds restricted to the Nasdaq line are the camp paying the difference; the company, funding its HBM race at premium prices, and Seoul holders, whose float shrinks, are the camps collecting it. How hard SK hynix pulls the issuance lever should become clear on October 27.
Deepdive
AI-generated from this story and its cited sources. Not investment advice.
