SK Hynix Inc’s US-listed American Depositary Receipt (ADR) surged 6% in premarket trading on August 19 after the company revealed a $29 billion plan to buy back and cancel treasury shares. The buyback involves 40 trillion won and aims to return over 50% of free cash flow generated from 2025 to 2027 to shareholders, according to livemint.com.
The buyback announcement follows SK Hynix’s recent $26.5 billion capital raise through a US listing last month, which occurred amid strong market enthusiasm driven by the artificial intelligence rally. The company’s decision to allocate a significant portion of future free cash flow to shareholder returns reflects growing pressure for higher payouts amid its AI-driven profit surge, livemint.com reported.
This buyback plan underscores SK Hynix’s strategy to enhance shareholder value in a competitive semiconductor market where AI applications are driving demand for memory chips. The $29 billion buyback is one of the largest in the sector, highlighting the company’s robust cash generation and confidence in its growth prospects. The move aligns with trends seen among major chipmakers responding to AI-related market dynamics, according to livemint.com.
SK Hynix’s ADR price movement and buyback plan will be closely watched by investors as the company executes its strategy to distribute more than half of its free cash flow from 2025 through 2027. The announcement was made public on August 19, marking a significant event in the semiconductor industry’s financial landscape, per livemint.com.