SK hynix Inc. (NASDAQ:SKHY) stock rose nearly 5% in Friday's premarket trading after the South Korean memory-chip maker halted plans for a U.S. initial public offering (IPO) of its flash-memory subsidiary, Solidigm.
The rebound came despite weakness in broader markets. Nasdaq futures fell 0.28%, while S&P 500 futures declined 0.44%.
The company abandoned a proposed listing that could have raised up to $15 billion and valued Solidigm at $150 billion, Reuters reported.
The decision eased concerns about a separate listing affecting existing shareholder interests. However, it also removed a potential source of funding for Solidigm's expansion.
SK hynix Halts Solidigm IPO Amid Market Volatility
In a Friday statement, SK hynix said the decision did not reflect any change in Solidigm's growth prospects or investment needs. The company cited market volatility and a broader correction in semiconductor stocks.
SK hynix said it would continue reviewing investment plans and financing options to support Solidigm's growth.
SK hynix's premarket gains suggest investors are attempting to buy the dip after a sharp decline from September highs.
The rebound comes despite weakness in U.S. stock futures, pointing to company-specific developments and technical factors.
The decision to halt Solidigm's IPO review could also ease concerns about shareholder value and a separate U.S. listing.
Technical Analysis
SK hynix remains under pressure despite Friday's rebound.
The stock trades 17.9% below its 20-day simple moving average (SMA) of $166.77. It is also 19.7% below its 50-day SMA of $170.44.
Both readings point to continued weakness in the intermediate trend.
Meanwhile, the relative strength index (RSI) stands at 29.81. A reading below 30 typically signals oversold conditions and can precede a short-term rebound.
The stock faces immediate support near $134, followed by its all-time low of $124.80.
Shares have declined 30.43% over the past month. A sustained recovery could require the stock to regain its key moving averages.
Analyst Outlook
Wall Street remains bullish on SK hynix despite its recent decline. The stock carries a consensus Buy rating and an average price forecast of $247.67. Recent analyst actions include:
- 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.
Price Action
SKHY Stock Price Activity: SK hynix shares were up 4.46% at $137.56 during premarket trading on Friday, according to market data.
