+34
SK Hynix shares fell after reports that its US data-storage subsidiary Solidigm is considering an IPO that could value the business at up to $100 billion. The potential listing has raised concerns about SK Hynix's complex ownership structure and possible dilution for shareholders, although a sale could unlock value and fund expansion.
-- SK Hynix Inc. shares fell as media reports of a potential listing of the chipmaker's US subsidiary added to concerns over its complex ownership structure.
Florida's Private Railroad Brightline Files for Bankruptcy SK Hynix shares dropped 5%, the most in two weeks, after Bloomberg confirmed over the weekend that Solidigm is considering a US initial public offering as soon as next year that could value the data-storage product maker at as much as $100 billion. SK Hynix's biggest holder SK Square Co. tumbled more than 8%, while SK Inc., which controls SK Square, retreated more than 6%.
An IPO of Solidigm would add to the multiple layers of ownership within the group, deepening the pyramid ownership structure, according to the Korea Corporate Governance Forum, a non-profit of investment professionals, which in August urged SK Hynix to drop the plan. SK Hynix owns the NAND memory unit through US subsidiary AI Company, making Solidigm a so-called grandchild company.
"I would be watchful rather than alarmed," said Jung In Yun, chief executive officer at Fibonacci Asset Management Global. "A US listing could unlock Solidigm's value and fund expansion, but SK Hynix shareholders would be giving up a portion of its future earnings. " "The key is the valuation and the use of proceeds," Yun said. "Selling a small stake at an attractive price could create value, while substantial dilution without a convincing investment return would be a concern.
" Shares of SK Hynix and other chipmakers, including Samsung Electronics Co., also came under pressure from broader risk-off mood after oil prices rose.
SK Hynix Solidigm US IPO Semiconductors Ownership Structure
Canada Latest News, Canada Headlines
Similar News: You can also read news stories similar to this one that we have collected from other news sources.
UCLA Friendship Researcher Shares Science-Backed Steps to Make and Keep FriendsJaimie Krems, director of the UCLA Center for Friendship Research, explains how frequent interaction, friendship markets, asking favors and self-disclosure can combat the loneliness epidemic affecting more than half of U.S. adults.
Read more »
Canadian Permanent Residency: A Personal Journey of Loss and HopeAreena Shrestha shares her emotional journey to Canadian permanent residency, highlighting uncertainty, sacrifices, and eventual approval through a health-care draw.
Read more »
Turkiye’s ruling-party deputy chair steps down after share trading allegationsTurkiye’s ruling party accepted the resignation of a deputy chair on Sunday after she was accused of selling shares worth tens of millions of dollars shortly before a stock market crisis.
Read more »
Physician Shares Five Essential Tips for College Student SuccessA physician and parent of two college students offers advice on homesickness, sleep, academic anxiety, and campus connection, drawing on survey data showing 60 per cent of students feel isolated while 71 per cent feel they belong.
Read more »