Activist Align Targets SK Over 75% Undervaluation
With the activist fund Align Partners Capital Management (hereinafter referred to as Align) disclosing a 1.5% stake in SK Inc. and urging a re-evaluation of its corporate value, SK Inc.’s stock price has shown a sharp upward trend for two days.Align CEO Lee Chang-hwan attended the ‘13D Monitor Activ
Activist fund Align Partners Capital Management has disclosed a 1.5% stake in SK Inc. and called for a reassessment of the company’s value. The fund’s CEO, Lee Chang-hwan, attended an investor summit in New York and revealed that the firm owns 1,088,753 shares of SK Inc., representing a 1.50% stake. Despite SK Inc.’s strong performance and AI business foundation, Align argues that the company is being heavily undervalued in the market due to a "double discount" structure stemming from its corporate governance.
SK Inc. owns a 32.2% stake in SK Square, which, in turn, holds about 20% of SK hynix. This creates a situation where the market value of the 6.5% stake in SK hynix indirectly held by SK Inc. vastly exceeds the company's market capitalization, leading to an estimated price-earnings ratio of just 1 time. Align suggests that SK Square could serve as a model for improving the stock price by reducing its NAV discount rate from 61.4% to 45.2%.
The activist fund's targeting has already prompted a significant reaction in the market, with SK Inc.'s stock price surging over 15% in intraday trading.
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