SK Hynix Announces $29 Billion Share Buyback Plan
Speakers
Ed Ludlow
— Co-Host, Bloomberg Technology
Summary
SK Hynix shares rose after the company announced a nearly $30 billion share buyback. Bloomberg's Ed Ludlow explains the buyback is aimed at stabilizing the stock after sharp gains and a decline from June highs. The repurchased shares will be cancelled, addressing shareholder dilution from the ADR listing, and SK Hynix plans to return 50% of cash flows to shareholders.
- SK Hynix shares rose about 5% after announcing a nearly $30 billion buyback.
- Ed Ludlow describes the buyback as a shareholder return policy to stabilize the stock.
- SK Hynix Korean shares were up 150% year-to-date and 275% last year but fell from June highs.
- The company will cancel repurchased shares rather than hold them as treasury stock.
- The cancellation helps unwind dilution from SK Hynix's ADR listing.
- SK Hynix is committing to return 50% of cash flows to shareholders.
Ideas
Buyback and cancellation stabilize SK Hynix.
SK Hynix announced a nearly $30 billion share buyback and share cancellation program designed to stabilize the stock after extreme volatility. The shares rose 150% year-to-date and 275% last year but fell significantly from June highs. The buyback cancels shares rather than holding them as treasury stock, unwinding dilution from the ADR listing, and the company is committing to return 50% of cash flows to shareholders.
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