SK Chair Chey Buys $3.5 Million of SK Hynix Stock on Open Market

Buys 3,620 SK Hynix Shares

SK Group Chairman Chey Tae-won bought about $3.5 million worth of SK Hynix shares on the open market. The purchase was viewed as a display of management responsibility after a plunge in semiconductor stocks that had been leading South Korea’s equity market fueled investor unease.

SK Group said July 30 that Chey bought 3,620 common shares of SK Hynix in open-market trading. Based on that day’s closing price, the purchase was worth 4.78564 billion won, or about $3.5 million. It was the first time Chey had bought SK Hynix shares in his own name.

Chey has maintained the group’s control over SK Hynix through SK Square, SK Group’s investment arm, which owns a 20.00% stake in the chipmaker. Even after the purchase, Chey’s direct holding amounts to 0.00%.

Chey decided to buy the shares as part of responsible management after concluding that SK Hynix stock had become excessively undervalued, according to the company. The 4.8 billion won purchase price was also interpreted as the maximum amount he could buy without prior disclosure. Under South Korea’s pre-disclosure rules for insider trades in listed companies, transactions exceeding 5 billion won, or about $3.6 million, must be disclosed at least 30 days in advance.

SK Hynix shares hit a record 2.987 million won on June 25. After fluctuating in the following weeks, the stock closed at 1.322 million won on July 30, just over a month later.

Chey recently said the drop in SK Hynix shares should be viewed over a longer time horizon. “Memory will continue to be needed, so over time the trend will move upward,” he said. Simply holding the stock, rather than buying and selling, is a good way to preserve wealth, he added.

Shin Jeong-eun, Hankyung.com reporter, newyearis@hankyung.com