SK Hynix Rises on Report It Is Weighing 16 Trillion Won ($11.5 Billion) Special Dividend; Company Says Nothing Finalized
Summary
- A report that SK Hynix is reviewing a 16 trillion won ($11.5 billion) special dividend to return gains from its Kioxia investment to shareholders helped lift the stock.
- SK Hynix said it is reviewing various shareholder return measures, but nothing has been finalized regarding a special dividend.
- Fund manager Kim Nam-ho said the possibility of a special dividend and Solidigm's withdrawal of a planned U.S. listing are short-term support factors for the share price, though they are unlikely to sustain a continued rise in the stock.
Forecast Trend Report by Period
SK Hynix shares rose even as artificial intelligence-related stocks weakened after a report said the company is considering a special dividend of about 16 trillion won ($11.5 billion).
Bloomberg reported on October 25 that SK Hynix is reviewing a large special dividend to return profits from its investment in Japanese chipmaker Kioxia to shareholders.
Earlier, Dong-A Ilbo reported that SK Hynix plans to pay 16 trillion won ($11.5 billion) as a special dividend out of roughly 20 trillion won ($14.4 billion) in gains from its Kioxia investment in the first half of this year. The report said the dividend plan may be disclosed alongside its third-quarter earnings on October 28.
SK Hynix said, however, that no decision has been made on a special dividend. The company said it is reviewing various shareholder return measures, but nothing has been finalized regarding a special dividend.
The stock rose as much as 3% in early trading, diverging from the broader market decline. Samsung Electronics shares fell 1.9% at the same time, while Kioxia shares dropped 3.7% in Japan.
Kim Nam-ho, a fund manager at Timefolio Asset Management, said prospects for a special dividend and Solidigm's decision to withdraw a planned U.S. listing are providing near-term support for SK Hynix shares. Still, those factors alone are unlikely to drive a sustained rally in the stock.
The prospect of a dividend emerged as the semiconductor industry faces mounting financial strain from increased AI spending. Selling pressure has persisted across global semiconductor and AI-related shares as concerns grow over rising debt at data center operators and the profitability of AI investments.
SK Hynix invested in Kioxia in 2018 when it joined Bain Capital's acquisition of Toshiba's memory business. Bain Capital sold its entire Kioxia stake this year, while SK Hynix currently holds bonds that can be converted into about a 14% stake in Kioxia.
Suehyeon Lee
shlee@bloomingbit.ioI'm reporter Suehyeon Lee, your Web3 Moderator.