SK Hynix Is Buying Back 3.3% of Its Shares and Canceling Every One
The memory giant is retiring roughly one share in every 30 -- and it says its shareholder-return target is moving from a ceiling to a floor.
SK Hynix, the memory maker, has announced plans to repurchase and subsequently eliminate about 3.3% of its outstanding shares. The board endorsed this 40 trillion won ($29 billion) program on August 19, with the buying period commencing the following day. The company heralds it as the most extensive share buyback executed by a South Korean publicly traded entity.
Unlike conventional U.S. buybacks, where acquired shares can remain dormant in the treasury for years, SK Hynix's approach results in the immediate removal of the shares from circulation. This unique method has evidently pleased investors, as evidenced by the company's Seoul-listed shares jumping 12% on Thursday, recovering most of the previous day's significant decline, and its Nasdaq-listed shares, representing a tenth of a Seoul-listed common share, climbing approximately 4% to close near $163.
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