SK hynix Inc. (NASDAQ: SKHY) stock fell Monday after reports that its U.S. subsidiary Solidigm is weighing an initial public offering as soon as next year.
The potential listing could value the data-storage company at as much as $100 billion, Bloomberg reported.
The report added that a Solidigm IPO could deepen SK Group's complex ownership structure. SK hynix owns Solidigm through U.S. subsidiary AI Company, making Solidigm a so-called grandchild company.
The Korea Corporate Governance Forum had urged SK hynix in August to reconsider the plan, citing governance concerns, the report added.
Fibonacci Asset Management Global CEO Jung In Yun said a U.S. listing could unlock Solidigm's value and fund expansion. However, SK hynix shareholders could give up part of the subsidiary's future earnings.
Solidigm and SK Hynix did not immediately respond to MarketDash's request for comment.
Chip Stocks Face Broader Market Pressure
SK hynix and other chipmakers also faced pressure from a broader risk-off move as oil prices rose. Nasdaq futures are down 0.56% while S&P 500 futures have shed 0.34%.
Analyst Outlook
SKHY carries a Buy consensus rating with an average price forecast of $247.67.
JPMorgan initiated coverage with an Overweight rating and a $245 price forecast on Sept. 10. Needham maintained a Buy rating and raised its price forecast to $220 on Aug. 24. Wolfe Research initiated coverage with an Outperform rating and a $200 price forecast on Aug. 4.
ETF Exposure
SKHY is held by the Capital Group International Focus Equity ETF (NYSE: CGXU), with a 2.20% weighting.
The Strive U.S. Semiconductor ETF (NYSE: SHOC) and NestYield Dynamic Income ETF (NYSE: EGGY) each have a 5.39% weighting in the stock.
Meaningful inflows or outflows from funds with larger SKHY positions can contribute to buying or selling pressure in the shares.
Price Action
SKHY Stock Price Activity: SK hynix shares were down 2.82% at $186.15 during premarket trading on Monday, according to market data.
