TLDR
- SK Hynix (SKHY) stock rose about 5% in pre-open trading Friday to $138.4 after the company halted its Solidigm IPO review.
- SK Hynix’s Seoul-listed stock reversed an early 4% loss to close up 4.4%.
- South Korean regulators had said a U.S. listing could break dual listing rules.
- Analysts say the move keeps Solidigm’s value inside the company and shifts focus to next week’s earnings.
- The ADR had fallen close to its 52-week low of $124.8 before the bounce.
SK Hynix (SKHY) stock rose about 5% in pre-open trading Friday, reaching $138.4. The move followed news that the company halted its review of a pre-IPO fundraise and IPO for Solidigm.
Quote data showed the ADR up $6.34, or about 5%. That came after an 8% drop in the prior session.
On the Seoul exchange, SK Hynix’s underlying stock reversed an early loss of more than 4%. It closed up 4.4%.
The KOSPI also recovered from an intraday drop of more than 4%. It finished the day modestly higher.
Why SK Hynix Dropped the Solidigm IPO
SK Hynix cited capital market conditions and recent share price trends. It said market volatility had grown and added to a correction in chip stocks.
The company said it will keep looking at other ways to fund Solidigm. Its investment needs have not changed.
SK Hynix wants to build a new U.S. chip plant to meet rising AI memory demand. It said Solidigm’s current facilities have limited capacity.
An IPO could have helped pay for that growth. It also could have given the company more room for dividends and buybacks.
South Korean regulators had raised concerns. The Financial Supervisory Service said Monday that a U.S. listing could break the country’s dual listing rules.
The IPO had been expected to raise as much as $15 billion. It would have valued the unit at roughly $150 billion.
What Analysts Are Saying
Josh Gilbert of eToro said SK Hynix holders got the outcome they were pushing for. He said it removes a governance worry and keeps Solidigm’s value inside the company.
Gilbert added that SK Hynix must show a credible funding plan without hurting buybacks and dividends. Earnings are due next week.
A Goldman Sachs note said a larger ADR float could one day qualify the stock for Nasdaq 100 inclusion. That could bring an estimated $15 billion in passive inflows.
The ADR had slipped close to its 52-week low of $124.8 before Friday’s bounce. Some investors had already expected the Solidigm decision.
The wider market was rough on Thursday. The Nasdaq Composite fell 2.6%, its worst day since June, while Nvidia dropped 4.4% and AMD fell 8.1%.
Nvidia CEO Jensen Huang told CNBC he does not expect a memory chip oversupply by 2029. CoreWeave fell 10% on the same day.
On Friday, the Nasdaq Composite was roughly flat and the S&P 500 was slightly lower. SK Hynix’s third-quarter results are due later this month.
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