SK Hynix stock fell 15.4% in Seoul on Monday, its largest single-day decline on record, as investors sold out of positions following the chipmaker's blockbuster Nasdaq $NDAQ debut last week.
A 20-minute market-wide trading halt was triggered after the broader Kospi index shed 9% on the same session, according to Bloomberg. Samsung Electronics shed close to 11%, while exchange data showed overseas investors exiting roughly 1.7 trillion won ($1.1 billion) in Kospi-listed shares, the bulk of which came from SK Hynix positions.
Before Monday's regular session opened in New York, the company's U.S.-listed ADRs were changing hands at $152.50, a decline of 9.2% from Friday's closing price of $168. That gap put the American receipts at a premium of approximately 37% over what the underlying shares fetched in Seoul, according to Reuters.
When SK Hynix began trading on the Nasdaq on FRiday, its ADRs climbed 14% above the $149 offer price at the open and ultimately closed out their debut session with a gain of 12.8%. The listing raised $26.51 billion, the largest share sale by a non-U.S. company on record. Demand from investors was so strong that the offering drew subscriptions exceeding seven times the available shares. Each ADR represents one-tenth of a common share.
Analysts cited several factors behind Monday's decline. Chan H Lee of Seoul-based hedge fund Petra Capital Management, where he serves as managing partner, attributed Monday's drop to investors cashing in gains after a widely anticipated event rather than to any shift in the company's underlying business prospects, according to Bloomberg. NH Investment & Securities senior analyst Ryu Young-ho pointed to disappointment over HBM4 volumes, telling Reuters that the ramp-up in chip shipments that the market had anticipated starting in the second quarter had not come through at the expected magnitude. Sentiment was further weighed down by a Korea Investment & Securities note circulating among traders that put the chipmaker's quarterly operating profit as much as 8% below what analysts had expected, according to Bloomberg.
Daniel Yoo, global strategist at Yuanta Securities, said the ADR debut created a new valuation benchmark for investors assessing the company's stock. "Everybody's really confused about what's going to happen to the memory demand and where the fair price is," Yoo told CNBC.
By the end of Monday's session, SK Hynix's total market value had slipped to $875 billion, retreating from the $1 trillion mark the company had surpassed earlier this year. Despite the recent turbulence, the Seoul-listed shares have still roughly sextupled in value over the prior twelve months, according to the outlet.