“Jensen Huang Fallout” ... Korean Retail Investors Buy the Dip in Nvidia After a Sharp Plunge, Spending Around 100 Billion Won

[Financial News] With Nvidia shares plunging in the wake of an affair scandal involving former Nvidia CEO Jensen Huang and his departure, domestic investors appear to have treated this week’s sharp drop as a buying opportunity and made large net purchases.
According to Save-ro, the Korea Securities Depository’s system, on the 14th, domestic investors net-bought $79.48 million worth of Nvidia shares (about 106.1 billion won) on the U.S. stock market from the 6th to the 12th, based on the inquiry dates. That was the fifth-largest amount among all U.S.-listed stocks.
On the 8th (local time), former CEO Jensen Huang admitted to having an affair with a person suspected of being a spy for a Chinese intelligence agency, and he stepped down as CEO on the 12th. Nvidia shares plunged 8.5% from the 9th to the 12th. In contrast with the broad rebound in the New York stock market, Nvidia shares continued to fall, and funds from Korean retail investors buying overseas stocks are believed to have poured in as they saw this as a chance to buy at the bottom.
The stocks most heavily bought by Korean retail investors during this period were high-risk, high-return products that aggressively bet on rises and falls in U.S. semiconductor indexes. Buying was concentrated in SOXL, which offers three-times leveraged exposure to a U.S. semiconductor index and drew $583.13 million (about 779.1 billion won). It was followed by TQQQ, a three-times leveraged Nasdaq 100 product, and QLD, which tracks the index at twice its value. In South Korea’s stock market, several hundred billion won also flowed into KODEX KOSDAQ 150 Leverage ETF and KODEX LEVERAGE, among others, reflecting clear expectations that indexes would rise.
Meanwhile, as stock market volatility increased, tension also gripped the securities industry. The actual value of forced sales against unpaid balances from brokerage transactions totaled 134.5 billion won over the week, 3.7 times the previous week’s 36.5 billion won. However, the balance of credit transaction loans—a gauge of “debt-financed investing”—stood at 25.7729 trillion won, its lowest level since the end of October last year. The trend toward indiscriminate borrowing to invest appears to have eased somewhat.
[email protected] Jeon Min-gyeong Reporter