Story
SK Hynix Shares Tumble on Reports of Potential $100 Billion Solidigm IPO
Summary
Shares of the South Korean chipmaker and its affiliates fell sharply following weekend reports that its U.S. subsidiary, Solidigm, could pursue an initial public offering as early as next year.
Shares of SK Hynix Inc. dropped significantly on Monday after weekend reports surfaced about a potential initial public offering for its U.S. NAND memory subsidiary, Solidigm, sparking investor concerns.
Market Sell-off
SK Hynix shares fell by as much as 5.1% in Monday trading. The negative sentiment had a ripple effect across related entities, with SK Square, the largest shareholder of SK Hynix, declining by as much as 7.1%. SK Inc., which is the top shareholder in SK Square, saw its stock fall by up to 5.4%.
The sell-off was part of a broader market decline, with the benchmark Kospi index falling 2.7%. Competitor Samsung Electronics also saw its shares drop 5.4%, a move attributed to wider risk-off sentiment driven by rising oil prices.
AdIPO Speculation
According to the reports, a U.S. listing for Solidigm could take place as early as next year and potentially value the company at up to $100 billion. The reports resurfaced speculation from August, when SK Hynix stated that no decision had been made regarding an IPO for the subsidiary.
The potential listing has previously drawn criticism. In August, the Korea Corporate Governance Forum, an investor advocacy group, publicly called on SK Hynix to abandon any plans for a Solidigm IPO. The organization argued that such a move would unnecessarily complicate the company's ownership structure, a common concern for investors in parent companies that list major subsidiaries.
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