A trade worth just $9,000 triggered a 30% flash crash in SK Hynix shares in Seoul Thursday, a similar incident to one that hit Korea's Nextrade exchange in late July. Societe Generale strategist Manish Kabra says the broader shakeout in Korean equities is nearly over, even as investors press Samsung and SK Hynix to return more of their AI-driven cash pile to shareholders.
A trade worth just 12.8 million won ($9,000) sent SK Hynix shares plunging 30% in premarket trading in Seoul Thursday. The stock pared much of the drop during the session but still closed the day down another 10%.
A second flash crash in weeks
The plunge struck on Nextrade, an exchange launched in 2025 that lets Korean shares trade outside the Korea Exchange's official hours. A similar flash crash of around 20% hit the same venue in late July. SK Hynix's US-listed shares fell 6% in premarket trade as the news spread.
SocGen sees the deleveraging as nearly done
Kabra told clients Thursday that Korea now trades on a forward price-to-earnings multiple 50% below its long-term average. He added that SK Hynix's share price is discounting a profit margin of just 40% next year, well below the 83% analysts currently forecast.
The volatility in Korea is nothing new, as tracked by the KOSPI volatility index. The gauge trades at 77, implying a daily move of around 4.8% in either direction. The Kospi index itself has fallen 32% from the record it set in June, while SK Hynix's own decline from its record reached 50%. FactSet estimates put the stock's 2027 earnings multiple at just 3.2 times.
According to Societe Generale strategist Manish Kabra: "the biggest deleveraging phase in Korean equities is nearly complete."
That call comes even as hyperscalers raise capex commitments and Elon Musk flagged upside for memory chip prices this week, against a backdrop where supply of advanced chips is growing around 20% a year versus demand growing around 200%. Sentiment had already soured after Sandisk's stock fell 5% Wednesday, then another 9% in premarket trade on guidance that fell short of expectations.
Shareholders want a bigger share of the AI boom
SK Hynix's operating profit jumped 557% year-over-year in Q2 2026, driven almost entirely by demand for high-bandwidth memory chips used in AI accelerators. Yet the stock has still fallen approximately 48% from its June peak. Samsung is down roughly 37% over the same stretch.
The two companies' combined net cash position is projected to reach $263 billion by the end of 2026. That figure dwarfs Nvidia's estimated $102 billion in cash reserves. Both currently return around 50% of free cash flow to shareholders, and investors are pushing that figure toward 80%.
A retail investor group called ACT launched a campaign this week demanding Samsung carry out a $32 billion share buyback. Samsung and SK Hynix have pledged a combined 3,200 trillion won toward domestic AI investment, and both companies say enhanced capital-return plans are coming, without committing to a timeline.
Sources: MarketWatch.com, Crypto Briefing
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