SK Hynix's American Depositary Receipts (ADRs), recently listed on the Nasdaq, have fallen below their initial public offering (IPO) price. Additionally, leveraged products linked to SK Hynix and Samsung Electronics on the Hong Kong stock exchange have also seen significant declines, raising concerns among investors.
On July 17, local time, SK Hynix's ADRs traded below the IPO price of $149, setting a new low. When the stock debuted on July 10, it initially exceeded the IPO price but has since declined amid a broader correction in semiconductor stocks.
Charts circulating online on this day showed the stock's rapid rise after its listing followed by a continuous downward trend, breaking below the IPO support level. Some investors commented, "With the stock now below the IPO price, those who have not sold are all facing unrealized losses."
The weakness is not limited to the U.S. market; the Hong Kong market is also experiencing declines.
The CSOP SK Hynix Daily 2x Leverage ETF (7709) on the Hong Kong exchange dropped nearly 20%, while Samsung-related leveraged products fell by around 19%. These single-stock leveraged ETFs are designed to track the daily price movements of their underlying assets at double the rate, meaning significant losses can occur when the underlying stock declines sharply.
This drop is attributed not only to issues specific to SK Hynix but also to profit-taking across the global AI and semiconductor sectors, compounded by weakness in tech stocks. Recently, global markets have seen a sell-off focused on AI-related stocks, prompting South Korean financial authorities to announce regulatory measures, including restrictions on new single-stock leveraged ETF products and increased margin requirements due to concerns over volatility.
As news of these developments spread, discussions regarding related policies have erupted in domestic online communities.
One user criticized the overall policy, stating, "The only successful policies have been the semiconductor cycle and corporate law revisions, while failures include the yellow envelope law, excess profit controversies, forced currency exchanges, investment mandates in specific regions, pension fund management, and the launch of leveraged products for Samsung and SK Hynix."
Other users reacted with comments such as, "Monday's emergency meeting for the director is imminent," "How can someone who changes their family tell us not to buy and sell?" and "It's contradictory to talk about shareholder value while revising corporate law and discussing excess profits," with some predicting Samsung's stock could drop to around 170,000 won.
* This article has been translated by AI.
Copyright ⓒ Aju Press All rights reserved.