VirtualBacon
Crypto Investor & Educator, Macro Analysis
SK hynix's ADR listing drawing leveraged ETFs is peak-cycle behavior, because the juiced vehicles always arrive after the demand is already in the price. A report in the thread notes the ADRs priced at a 3% premium as Wall Street readies a wave of leveraged ETFs on what is the biggest chip listing ever. x.com
SK hynix's record $28 billion ADR sale looks like a top signal: peak supply meeting peak demand, just as the AI capex trade cracks. The oversubscription is better read as sellers getting a great price for record supply than as smart buyers being early. The same week, Samsung's earnings spooked the market and Intel fell almost 10%. The test is whether SK hynix holds its issue price; if it trades fine while capex names bleed, the buyers were right. x.com x.com x.com
SK hynix remains a buying opportunity, with its US ADR premium over Korean shares now at an all-time low of 32.66%. x.com x.com
SK hynix should reprice strongly because its blowout earnings make the case that memory is structurally different now. At the current earnings pace, it would earn back its entire market cap in two years; buybacks and dividends also return cash to shareholders and add to value. x.com
SK hynix's expected widening supply-demand gap makes the 2028 downcycle implied by its valuation seem impossible. SK hynix management says its shares are undervalued relative to earnings and cash flow, and that assessment rings true. x.com x.com
Deployment limits will slow AI hardware spending and expose cyclical suppliers such as SK hynix. Amazon has hardware waiting for power, and Broadcom's CEO said some clients delayed shipments because they could not deploy. Cheap forward multiples can mark a cyclical peak as analysts extrapolate growth. The slowdown could have begun or be a year away; timing is uncertain, so reducing cyclical risk in favor of healthier, genuinely cheap names looks better. x.com x.com x.com
Memory makers' long-term agreements cannot protect pricing when buyers regain leverage. The market underestimates downside even before a price collapse; SK hynix's agreements price within market-linked ranges, per @jukan05. The agreements will be ripped apart when the market turns to buyers, at the latest when China ramps. SK hynix, Samsung, Micron, SanDisk and Kioxia are exposed. x.com
SK hynix's 'insane' earnings set up a sharp move higher in the shares. x.com
SK hynix was priced to perfection, and its relisting into QQQ was meant to drive it higher, but it missed its first quarter after going public, which a newly listed company can't afford to do. x.com x.com
Korean equities have a central role in the AI trade because Samsung and SK hynix supply most of the memory it needs. Despite the shakeout, the KOSPI leads the major markets shown at roughly +36% this year. The bullish lean faces a flow warning: Korean semiconductor ETF 20-day flows fell from nearly +$4B in June to about -$703M by October 18 as the index approaches rising support. x.com x.com x.com x.com x.com
SK hynix's leverage-driven selloff looks close to ending now that Korean regulators have stepped in. The finance ministry, Financial Services Commission, Bank of Korea and Financial Supervisory Service are tightening single-stock leveraged ETFs, the core of the volatility, with a joint meeting on July 16. SK hynix shares traded their heaviest volume in two years and half of the 7709 leveraged ETF's holdings turned over, as buyers scooped up distressed shares, suggesting a bottom is forming. … Show more
SK hynix is a leveraged $1.5 trillion company headed for a "doomsday" reckoning. Its shares have already dropped from $194 last week to $120. x.com
