Why is SK Hynix stock falling today?

SK hynix (SKHY) announced a $29 billion stock buyback plan and aims to return over 50% of free cash flow to shareholders. Wedbush analysts view this positively, expecting it to close the valuation gap with peers. The company reported strong Q2 results, with revenue up 257% YoY and net income up 1,242% YoY, driven by AI memory demand. Analysts have a consensus 'Strong Buy' rating with a price target of $245.40, implying 57.5% upside. S&P upgraded its credit rating to 'A-'.

The KOSPI index fell 2.22% by late Monday morning, driven by profit-taking in large-cap tech shares. Samsung Electronics dropped 7.28% after disappointing investors with its shareholder return plan. The won strengthened slightly against the dollar. Other major companies like SK hynix, Hyundai Motor, and KB Financial also saw declines.

HSBC anticipates SK Hynix's Nasdaq listing will increase its price-to-book ratio from 2.8 to 3.4, potentially boosting valuation by 20% and narrowing the gap with Micron. The firm cites improved investor access and shareholder-friendly policies. SK Hynix plans to raise $29.4 billion, with proceeds funding production facilities and EUV scanner acquisitions. Micron's shares fell nearly 6% in pre-market trading.

SK Hynix (SKHY) plans to buy back and cancel 3.3% of its shares, worth 40 trillion won ($29 billion), over three months. The company believes its stock is undervalued. Shares rose 12% in Seoul and 4% on Nasdaq. SK Hynix also announced a new shareholder return framework, aiming to return over 50% of cumulative free cash flow from 2025-2027. The company reported record revenue of 79.3 trillion won in Q2, with a 76% operating margin.

Samsung Electronics and SK Hynix announced large-scale shareholder returns, driving investor interest in semiconductor stocks. Samsung plans $90B-$110B in returns by 2026, while SK Hynix will buy back $40B in shares. ETFs tracking these companies saw high trading volumes and returns, with Samsung-related ETFs leading. The global semiconductor market remains strong due to AI demand, with NVIDIA reportedly raising prices due to memory chip shortages.

SK hynix (000660.KS) launched a 40 trillion won ($28.8 billion) share buyback, significantly impacting South Korea's KOSPI. The company bought 1.2243 trillion won worth of shares in two days, driving a surge in 'other corporations' net buying. Despite selling by retail investors, foreigners, and institutions, the KOSPI rose 0.88% on the 21st. Samsung Electronics (005930.KS) also announced a 15 trillion won buyback, potentially further supporting the index.