Short sellers have quickly turned their attention to SK Hynix’s newly listed U.S. stock, adding bearish bets just weeks after the South Korean memory chip maker debuted on the U.S. market, injecting new volatility into an already turbulent semiconductor sector. According to S3 Partners, as many as 23 million of its American Depositary Receipts are currently sold short. Based on approximately 178 million ADR of public shares, this represents almost 13% of the tradable shares. This is a much higher number than the roughly 15 million shares announced by the exchange in mid-July, S3 said. This rapid increase highlights how little time traders are wasting their time betting on one of the biggest hardware beneficiaries of artificial intelligence. Since its U.S. debut on July 10, SK Hynix’s ADRs have fallen about 13% from its public offering price of $149 and about 33% from its post-listing peak. SKHY 1 Million Mountains SK Hynix Since U.S. Debut The rise in short interest coincides with a surge in stocks and other semiconductor stocks as investors reassess whether soaring AI spending can continue to justify higher valuations. Chip stocks have come under new pressure in recent trading after Alphabet Inc. upgraded its capital spending outlook, raising concerns that hyperscalers will continue to ramp up infrastructure spending even as investors increasingly scrutinize investment returns. The PHLX Semiconductor Index has fallen more than 22% this month alone. SK Hynix stock fell on Wednesday despite reporting explosive second-quarter results. While the company posted impressive growth in both revenue and revenue, the numbers didn’t justify Wall Street’s high expectations for one of the biggest winners of the AI boom. Some of the short selling may also reflect arbitrage activity rather than outright bearish bets. Some investors short sell ADRs while simultaneously holding the underlying Seoul-listed stock to take advantage of the price difference between the two securities.
