SK Hynix shares rose on Aug. 5 as investors focused on the end of the company’s 25-trading-day quiet period following the issuance of its American depositary receipts, or ADRs. The stock climbed as much as 7.9% in morning trading in Seoul, outpacing Samsung Electronics, which rose 6% during the same stretch. The move also came after gains in U.S. chipmaker shares overnight.
Market attention centered on whether the end of the quiet period on Aug. 4 clears the way for SK Hynix to disclose a shareholder return plan. Independent analyst Douglas Kim said he believes the company is likely to announce a major shareholder return program soon. According to Kim, the package could include a mix of share buybacks, share cancellations and a special dividend.
Brokerages also added to the focus on the stock. Several firms, including William Blair, initiated coverage on SK Hynix ADRs overnight and assigned buy ratings. SK Hynix is a key supplier of high-bandwidth memory chips to Nvidia.
SK Hynix shares moved higher on Aug. 5, helped by overnight gains in U.S. chipmaker stocks and market speculation that the company may soon disclose a stock buyback plan and other shareholder return measures.
A key supplier of high-bandwidth memory chips to Nvidia, SK Hynix rose as much as 7.9% in Wednesday morning trading in Seoul, ahead of rival Samsung Electronics, which was up 6%.
Focus turns to the end of the quiet period
Analysts and local South Korean media have been watching the 25-trading-day quiet period tied to the company’s American depositary receipt, or ADR, issuance. That period ended on Aug. 4. The market expects the expiration of the quiet period to remove an obstacle to disclosing a shareholder return plan.
Independent analyst Douglas Kim said, "In my view, given that the quiet period ended on Aug. 4, SK Hynix is very likely to announce a major shareholder return plan soon."
Buybacks, cancellations and special dividends in view
Kim said the plan could include "a combination of share buybacks, share cancellations and a special dividend."
Several brokerages, including William Blair, also initiated coverage on SK Hynix ADRs overnight with buy ratings.
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