SK Hynix shares suffered their steepest decline on record in Seoul following Friday's blockbuster ADR debut in New York. The sell-off spread across South Korea's memory and data storage stocks, helping to drive the benchmark KOSPI down as much as 9% and triggering a 20-minute market-wide trading halt.
SK Hynix fell 15% to 1.845 million won on Monday, while its ADRs dropped nearly 9% in premarket trading to $153.50. The decline came as the chipmaker began trading under its ticker "SKHY" following last Friday's $26.5 billion U.S. listing, the largest share sale by a foreign company.
"Korea's SK Hynix shares are now down 15.6% on the day, for a 37% decline since the June 22 high. Still, the stock is 160% higher than at the start of the year. In part the drop in the Korea listing reflects a switch trade – selling the locally listed shares to buy the US ADRs, which launched on Friday. The stock is a darling of the retail investor, which can squeeze it in both directions," UBS analyst Simon Penn wrote in a note on Monday morning.
Goldman analyst Christopher Cha noted, "And today another -9% move.. Foreign and local institutional investors ended the day as net sellers, offloading $1.13 billion and $1.5 billion respectively. Local institutional selling was heavily concentrated in ETF-related liquidations, while foreign selling was almost entirely passive, with program trading accounting for $1.18 billion of the net outflows. Our High-Touch trading desk observed flows that mirrored this passive-heavy dynamic; institutional block activity was surprisingly muted despite the index's dramatic drop. We saw selective selling from momentum-driven hedge funds, while LOs remained quiet."
What changed last night was the buyer base: after months in which foreign outflows were abso
