Key Takeaways:
SK Hynix Inc. ADRs reversed a 5% pre-market decline after Chairman Chey Tae-won bought 3,620 shares worth 4.79 billion won.
"This is a practice of responsible management," an SK Group official said, according to a regulatory filing with the Financial Supervisory Service on Thursday.
Chey purchased the shares on the open market at the closing price of 1.322 million won each, marking his first-ever personal acquisition of SK Hynix stock. The purchase was disclosed under South Korea's Capital Markets Act, which requires executives and major shareholders of listed companies to report transactions of 5 billion won or more at least 30 days in advance.
The chairman had previously controlled SK Hynix through SK Square, the company's largest shareholder, without holding any direct equity. His decision to buy shares directly comes as SK Hynix's stock has fallen sharply from 2.18 million won immediately after its US ADR listing on July 10 to 1.322 million won on Wednesday — a decline of about 39% in three weeks.
The broader memory sector has faced a selloff in recent weeks. The Roundhill Memory ETF, which counts SK Hynix as its second-largest holding at 16.5% of assets, has dropped 39% from its 52-week high of 81.34 to 44.85 as of Wednesday's close. Micron Technology Inc., another top holding, has fallen nearly 40% from its peak amid concerns that the AI-driven memory supercycle may be peaking.
Chey addressed the volatility at the Korea Chamber of Commerce and Industry's Jeju Summer Forum on July 17, saying the stock "rose too quickly and is now adjusting to reality." He added that "memory will always be needed, so it will trend upward over time."
SK Hynix posted second-quarter results last week showing revenue growth of 257% year over year and operating profit growth of 557%, with an operating margin of 76%. The company holds a 58% market share in high-bandwidth memory, the critical component for AI accelerators, and has secured long-term agreements with key customers that provide revenue visibility through 2028.
The insider purchase signals confidence in SK Hynix's medium- to long-term competitiveness at a time when the stock trades at undemanding forward free cash flow multiples of 3.5 to 6.3 times through 2028, according to estimates from analysts covering the stock. Investors will watch whether the buying stabilizes the ADR above recent lows and whether the memory sector's AI-driven demand narrative regains traction ahead of the next earnings cycle.
This article is for informational purposes only and does not constitute investment advice.
