The securities industry is reacting with a sense of relief to the news that SK hynix has suspended its review of an initial public offering (IPO) for its U.S. grandchild company, Solidigm. With concerns over excessive investment in artificial intelligence (AI) emerging and global investor sentiment weakening, analysts assess that one burden on individual stock prices has been lifted.
Choi Bo-young, a researcher at Kyobo Securities, told MoneyToday on Friday, "Domestic and foreign institutional investors had hesitated to buy SK hynix shares due to the Solidigm IPO issue," adding, "The company can now focus more on its earnings, which is positive for SK hynix."
In fact, following the emergence of rumors about a Solidigm IPO, SK hynix faced concentrated selling by foreign investors. The cumulative net selling amount by foreign investors from August 6 to the previous trading day reached 25.982 trillion won.
Kim Sun-woo, a researcher at Meritz Securities, stated, "We are paying attention to the strong will toward shareholder returns and expect it to become an effective trigger for a stock price rebound." He added, "Shareholder return plans based on strong cash generation capabilities are expected to be further strengthened. It is a time to watch whether shareholder return plans will be concretized in the third-quarter earnings briefing scheduled for the 28th."
Yang Hyun-kyung, a researcher at iM Securities, noted, "As this decision accepts concerns over damage to shareholder value, caution regarding discounts from dual listing and share dilution may ease," while also stating, "There is a situation where opportunities for external capital raising decrease and the burden of future investment funds may increase."
Lee Min-hee, a researcher at BNK Investment & Securities, said, "SK hynix holds abundant cash." She added, "In a situation where CXMT and Kioxia are moving to secure capital, it appears SK hynix tried to raise funds cheaply by leveraging the memory boom."
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