SK Hynix Shares Surge on Record $28.6 Billion Buyback

SK Hynix, a South Korean semiconductor company, announced a 40 trillion won (€25 billion) share buyback program to boost market valuation. The company plans to repurchase and cancel 24.1 million shares, citing undervaluation despite strong cash flow and growth prospects. The move follows a recent 10% share price drop amid market volatility. SK Hynix also raised its target for shareholder returns to over 50% of cumulative free cash flow.

Gold prices rose nearly 4% to $4,500 after the US Treasury announced it would double buybacks of longer-dated Treasuries, suppressing yields and weakening the US dollar. The move signaled government intervention to control bond markets, which could lead to a weaker dollar and potentially higher interest rates. The Fed's stance on inflation and rate hikes remains uncertain. Bitcoin and crypto-related stocks also saw gains.

SK Hynix and Samsung announced large shareholder return plans, with SK Hynix approving a $28.6B buyback and Samsung preparing a $72B return package. Micron, despite strong cash generation, has not followed suit, with minimal capital return. Micron's financials show significant cash reserves and flexibility, but structural differences and cyclical caution may delay any major shareholder returns.

SK Hynix shares rose 11% after announcing a $28.7B share buyback and cancellation plan, representing 3.3% of its total shares. The company cited undervaluation and strong cash position. It also raised its shareholder return target to over 50% of free cash flow for 2025-2027.

Samsung Electronics and SK Hynix plan record shareholder returns. Samsung aims for a 100 trillion won ($72 billion) program, while SK Hynix announced a 40 trillion won ($29 billion) buyback. Both companies' shares surged. The moves follow investor concerns about AI hardware spending sustainability. Samsung's returns may focus on cash dividends, while SK Hynix raised its return pledge to $170 billion for 2025-2027.

Treasury buybacks lowered bond yields, benefiting tech stocks. SK Hynix and Samsung rebounded, but U.S. chip stocks need confirmation. Moderna surged 177% on positive clinical trial results. Bitcoin neared $70,000, with Ethereum also showing strength. FOMC minutes indicated higher rates may be possible if inflation persists. Nasdaq futures were up 0.4%, S&P 500 futures up 0.15%.