SK Hynix Falls In Seoul After Strong Nasdaq Debut: MU, SNDK, US Memory Stocks Decline Overnight Amid Fresh US-Iran Tensions

• The U.S. and Iran exchanged fresh strikes over the weekend, putting their fragile ceasefire at risk and raising fears of a renewed conflict.
• Micron shares declined 3.8% ahead of Monday, while SanDisk and Western Digital stocks were down over 4%.
• Retail traders were heavily discussing memory names late Sunday, with many fearing chip stocks would remain volatile on Monday and the following days.

SK Hynix shares tumbled nearly 10% in Seoul on Monday, while U.S. chip stocks declined in overnight trading as renewed U.S.-Iran strikes threatened to unravel their fragile truce, sending jitters through global markets.

The U.S. launched several waves of strikes on Iran on Sunday over an Iranian attack on a container ship in the Strait of Hormuz earlier in the weekend. Iran responded with attacks on Bahrain, Kuwait, Qatar, Jordan and Oman, and said that the latest U.S. strikes have “rendered futile” all the diplomatic efforts of the last few months.

After a blockbuster Nasdaq debut on Friday that sent its shares up nearly 13% and boosted sentiment around memory-chip stocks, SK Hynix faced heavy selling in Seoul on Monday. Its shares were down more than 8% by 10 am local time, a decline likely to spill over into U.S. premarket trading.

In the U.S., Micron’s shares declined 3.8% ahead of Monday, while SanDisk and Western Digital stocks were down over 4%. The move comes after a choppy last few weeks, as all three names have slid well below their peaks hit late last month.

SK Hynix Stock Moves: How Did Retail React?

On Stocktwits, retail sentiment for SKHYV dropped to ‘bullish’ late Sunday from ‘extremely bullish’ the previous day.

“An 8% drop in the Korean market of SK Hynix will not cause an equal drop in the US market of SKHY,” a user wrote, while another said, “Anyone bought on Friday is going to be a bagholder for maybe 1-3 years or maybe forever!!

The sentiment remained ‘bearish’ for WDC, ‘bullish’ for MU and DRAM, and ‘extremely bullish’ for SNDK. “$DRAM wow this is not good. time to start praying that $50 will hold on this sell-off,” a trader wrote.

Some traders said they believe the memory supercycle is nearing its end. “$MU Semis are late in bull cycle were getting closer to the average cycle length. Maybe one more leg up if lucky but the big money has been made,” one wrote.

SK Hynix’s Blockbuster IPO

The South Korean memory giant raised $26.5 billion by issuing 177.9 million American depositary receipts (ADRs) priced at $149 each last week. 

The share sale topped the $25 billion raised by Chinese e-commerce giant Alibaba in 2014 and was the second biggest U.S. stock sale on record after SpaceX’s $75 billion offering last month.

SK Hynix said it will use the cash to expand its chip-making facilities and purchase advanced equipment, according to its filing. The company’s Seoul-listed stock has already more than tripled this year, boosted by insatiable global demand for its chips and hardware used in data centers.

Amid surging investor interest, the company’s listing gives U.S. investors an alternative – and a benchmark – to Micron and other leading memory chipmakers, whose shares have also posted remarkable gains over the past year.

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