SK Hynix shares plunge 15% to one-month low after blockbuster Nasdaq debut

Shares of South Korean memory chip giant SK Hynix plunged 15% during Monday's trade (13 July) in Seoul, marking their biggest one-day decline on record and dropping to a one-month low, as investors appeared to book profits following the company's blockbuster Nasdaq debut.

The sharp sell-off also coincided with broad-based weakness across global semiconductor stocks, as investors reassessed the recent AI-driven rally and turned cautious ahead of the start of the US second-quarter earnings season.

The decline weighed heavily on South Korea's equity market, with the Kospi tumbling about 9%, briefly triggering a circuit breaker—a temporary trading halt designed to curb panic selling during periods of extreme volatility.

Blockbuster Nasdaq debut

Shares of SK Hynix made a stellar debut on the Nasdaq, with its US-listed American Depositary Receipts (ADRs) surging 13% after the company raised $26.5 billion through the offering. The transaction marked the largest-ever US listing by a foreign company.

SK Hynix's ADRs, where 10 ADRs represent one common share, opened at $170, well above the offering price of $149 per ADR. The issue price itself was set at a 2.7% premium to the stock's average trading price over the previous three sessions in Seoul.

The transaction also ranks as the second-largest equity offering in US history, behind SpaceX's record IPO last month. Although SK Hynix did not conduct a traditional US IPO, it listed ADRs—US-traded certificates representing shares already listed on the South Korean stock exchange.

According to a Reuters report, the proceeds will be used to fund new manufacturing facilities while providing SK Hynix with direct access to the world's deepest pool of equity investors. The offering was reportedly more than seven times oversubscribed, underscoring strong institutional demand.

AI-driven rally loses momentum

SK Hynix has been one of the biggest beneficiaries of the artificial intelligence boom, thanks to its leadership in high-bandwidth memory (HBM) chips, a critical component used in AI accelerators.

Investor enthusiasm for AI propelled the stock sharply higher from late 2022, making it one of the best-performing semiconductor stocks globally, resulting in an 807% surge in two years.

However, the shares have now fallen more than 30% from their record high reached in June, as investors increasingly question whether the rapid surge in AI-related spending has pushed valuations beyond fundamentals.

South Korea has emerged as a key barometer for the global AI trade, with semiconductor stocks driving the Kospi's outperformance this year. However, the near-parabolic rally has turned volatile in recent weeks as investors question whether soaring valuations are justified, particularly amid uncertainty over whether hyperscalers' massive AI investments will generate sustainable returns.

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