📉 SK Hynix stock suffers worst day in history

Shares of Korean memory chip maker SK Hynix closed Monday trading in Seoul down 15.4%, the biggest single-day drop in the stock's history. The sharp sell-off came just days after the company's successful debut on the Nasdaq in New York, where its American depositary receipts (ADRs) gained 13% on Friday.

The decline is linked to uncertainty over how to price the Korean shares relative to the newly traded ADRs. According to analysts, the Nasdaq listing created a new reference point for the company's valuation, and a gap of more than 20% has now emerged between the two stocks, whereas TSMC $TSM ADRs trade at a premium of around 13-14% to the domestic shares. The sell-off was also fuelled by an increased share supply due to the ADR issuance.

The valuation gap between the Seoul shares and the New York ADRs will likely remain in focus for some time until the market coalesces around a clearer reference valuation for the company.

Do you hold SK hynix ADRs traded on the New York Stock Exchange, or do you own the shares directly from the Korean market?