DRAM, MU, SNDK: US Memory Stocks Pare Gains After Boost From Samsung Averting Major Worker Strike

• SanDisk and Micron stocks dropped in Friday’s premarket session.
• Samsung and its workers said Thursday they had reached a tentative agreement on pay and bonuses, averting a major strike that was scheduled to begin the same day.
• Stocktwits sentiment was ‘bearish’ for MU, SNDK, WDC, STX, and DRAM on Friday.

U.S. memory stocks broadly declined in early premarket trading on Friday, giving back some of the previous session’s gains after shares had rallied on news that Samsung reached a tentative agreement with its workers, easing fears of a strike that could have disrupted the global supply chain. 

The Roundhill Memory ETF (DRAM) declined 1.5%, tracking a 2.3% drop in Samsung shares in Seoul on Friday. Samsung is one of the top constituents of DRAM.

SanDisk shares declined 1.4%, while Micron shares dropped 0.4%. Shares of Seagate and Western Digital were marginally higher.

DRAM had risen 5.5% on Thursday after Samsung and its workers reached a tentative pay deal, a last-minute agreement following marathon talks that had failed multiple times. Samsung shares had gained over 8% on Thursday.

Samsung Avoids Worker Strike

Under the deal, all Samsung chip workers will receive 50% of their annual salary as a regular cash bonus, according to Reuters. On top of that, the company will set aside 10.5% of operating profit for special bonuses, which will be paid in stock. Of those special bonuses, 40% will be distributed across its entire chip business this year, and the rest will be used to reward employees in the memory chip unit. 

The union will vote to formalize the deal in the company days, although the development is a major relief for the company as well as South Korea. Samsung accounts for about a quarter of the country's exports, and the planned strike was expected to inflict significant damage to the ​economy and dent global chip supply if it went ahead. 

Retail View On US Memory Giants

On Stocktwits, the retail sentiment was ‘bearish’ for MU, SNDK, WDC, STX, and DRAM. The dull mood comes as U.S. memory chip stocks have surged sharply in recent months, leaving investors skeptical of further upside.

Year to date, STX shares have tripled, while WDC stock has gained 183%, MU stock is up 167%, and SNDK stock is up a staggering 550%.

For updates and corrections, email newsroom[at]stocktwits[dot]com.