Business · Markets · 2 hrs ago
SK Hynix Shares Trade Nearly 47% Higher in the US Than in Korea
SK Hynix’s US-listed shares traded 46.8% above its Korean shares on Oct.
21, according to an analysis by DS Investment & Securities.
Each US depositary receipt represents 10 Korean ordinary shares, so the prices should be closely linked.
The gap widened after US demand for the receipts increased, while selling and hedging activity may have weighed on the Korean shares.
Investors could normally buy the cheaper Korean shares, convert them into US receipts and sell them in the United States.
That trade is blocked because the 17.79 million-share conversion limit has been used up; converting US receipts back into Korean shares is still allowed.
Analysts recommend raising the limit in stages and making the conversion process simpler, noting that freely convertible shares in some other companies have much smaller price gaps.
Any increase would not add shares, but could affect shareholder voting, so that issue would need consideration.
SK Hynix’s US-listed American depositary receipts (ADRs) traded 46.8% above the equivalent Korean shares on October 21, according to a report by DS Investment & Securities.
The price gap widened from an average of 25.6% in July to 34.2% in August and 40.0% in September.
The report said limits on converting Korean shares into ADRs have blocked arbitrage that could narrow the gap.
The 17.79 million-share conversion limit was fully used during the ADR offering.
DS Investment & Securities called for a gradual increase in the conversion limit and simpler procedures.
- Who
- SK Hynix, whose Korean shares and US-listed ADRs are trading at different prices. DS Investment & Securities analyzed the gap.
- What
- The ADRs traded 46.8% above the equivalent Korean shares. The report urged expanding and simplifying share conversions.
- When
- The gap was 46.8% on October 21, 2026. The report was published on October 23.
- Where
- The ADRs trade in the United States, while the ordinary shares trade in South Korea.
- Why
- The report cited US-focused demand for the ADRs, selling pressure on Korean shares and restrictions on converting Korean shares into ADRs.
This story does not have two clearly opposing sides.
SK Hynix ADRs were listed on Nasdaq, and the average price gap in July was 25.6%.
The average price gap widened to 34.2%.
The average price gap widened to 40.0%.
The gap reached 46.8%.
DS Investment & Securities published its report calling for a higher conversion limit and simpler procedures.
- Price gap on October 21
- 46.8%
- ADR conversion ratio
- 10 ADRs represent 1 Korean ordinary share
- Conversion limit
- 17.79 million shares, fully used
- US ADR registration
- About 24% of shares outstanding
- Company-approved conversion limit
- 2.4% of shares outstanding
What people are saying
The realistic approach is to raise the conversion limit in stages and simplify the process by obtaining the company's blanket consent in advance.