“Even the chairman is in the red” ... SK Hynix plunge sends shares below purchase price [Stock NOW]

[Financial News] SK Hynix shares plunged by double digits intraday, falling below even the purchase price paid by SK Group Chairman Chey Tae-won. Chey’s shares, bought in July for about 4.9 billion won and showing a mark-to-market gain of more than 1.3 billion won just one day later, have moved into loss territory. Leveraged exchange-traded funds (ETFs) that offer twice the exposure to share-price gains have fallen nearly 80% from their listing prices.
According to the Korea Exchange, as of 1:30 p.m. on the 15th, SK Hynix was trading at 1,269,000 won, down 150,000 won (10.57%) from the previous trading day. Its intraday low fell to 1,251,000 won. That is below the average price Chey paid for the shares in July.
On July 30, Chey bought 3,620 common shares of SK Hynix on the market at an average price of 1,353,677 won per share. The total acquisition cost was about 4,900,310,000 won. It was the first time Chey had directly purchased SK Hynix shares in his own name.
At a share price of 1,269,000 won, the current valuation is 4,593,780,000 won. The mark-to-market loss against the purchase amount is about 306,530,000 won, and the return is -6.26%.
At the time, SK Hynix closed at 1,718,000 won on July 31, the day after Chey bought the shares, up 29.95%. The value of his shares rose to about 6,219,160,000 won, generating a mark-to-market gain of about 1,318,850,000 won in a single day.
The decline in SK Hynix leveraged ETFs was even steeper. During the session, the KODEX SK Hynix Single Stock Leverage ETF fell 21.63% from the previous trading day to 5,290 won. That is a 77.44% decline from its opening price of 23,450 won on its first day of listing, May 27. An investment of 10 million won at that opening price would have shrunk to a price-based valuation of about 2.26 million won.
The TIGER SK Hynix Single Stock Leverage ETF also traded at 4,435 won, down 22.74% intraday. Its decline from the 19,985 won price reported at listing was 77.81%. Both products have fallen to less than a quarter of their listing prices.
As the declines deepened, the gains needed to recover the principal also increased. From those prices, the KODEX product would need to rise about 343% and the TIGER product about 351% to return to their listing prices.
The sharp drop is thought to reflect the impact of concerns over rising inflation in the United States and the profitability of artificial intelligence (AI) investments, which weighed on sentiment toward semiconductor stocks.
In South Korea’s stock market, selling was concentrated in large-cap semiconductor stocks such as Samsung Electronics and SK Hynix. Sell-side sidecars were triggered early in trading in both the KOSPI and KOSDAQ markets, and circuit breakers were also triggered in the afternoon after each index fell by at least 8%.
[email protected] Ju Won-gyu Reporter