SK Hynix’s Stock Has Been Plummeting. Short Sellers Are Piling Up
Getty Images
The ADRs of South Korean chipmaker SK Hynix have been falling over the past weeks amid a broader rout in the sector.
In this context, short sellers have been piling up bets against the company. More than 10% of the company’s shares that are available for trading are being sold short, data from S3 Partners and reported by CNBC shows.
The outlet noted that since the ADRs debuted in the U.S. on July 10, they have fallen about 13% and 33% from their peak.
The company reported its second-quarter earnings on Wednesday, failing to satisfy analysts’ expectations. Revenue climbed 257% year-on-year while operating profit jumped 557%. Revenue increased 51% and the operating profit 61%. The stock fell as much as 15% in South Korea before trimming losses.
Short selling involves borrowing shares, selling them at the current market price and then repurchasing them later at a lower price, allowing investors to pocket the difference if the stock declines.
Another company under pressure from short sellers is SpaceX. Last week, investors betting against the company had amassed an estimated $15.5 billion in paper profits just weeks after the company’s blockbuster initial public offering.
The company’s stock has kept falling below its IPO price, standing below $115 on Wednesday, almost 50% below its peak.
Company CEO Elon Musk has publicly dismissed the growing wave of bearish bets. In a post on X earlier this month, he warned investors against maintaining large short positions in the company. “The survival probability of firms who maintain a significant short position in SpaceX over time is very low,” Musk wrote.
