SK Group Chairman's first-ever SK hynix bet pays off instantly as chip rally erases days of losses

SK Group Chairman Chey Tae-won's newly purchased stake in SK hynix ballooned in value by 1.32 billion won ($923,000) in a single day, as U.S. semiconductor stocks surged and foreign investors piled into the chipmaker's shares.

Chey bought 4.9 billion won worth of SK hynix shares on Thursday, which was his first purchase of the chipmaker's stock. The following trading day, SK hynix hit its daily price limit, closing at 1.72 million won and lifting the value of his stake to 6.2 billion won, a paper gain of 26.92 percent.

He previously held shares only in SK Inc., the group's holding company.

The Korean bourse caps how much a stock can move in a single session; the limit for Kospi-listed shares has stood at plus or minus 30 percent since June 15, 2015. SK hynix shares have fallen sharply since touching an all-time intraday high of 2.98 million won on June 25.

According to a regulatory filing Friday, Chey bought 3,620 common shares through open-market transactions at 1,353,677 won apiece.

The purchase came during a sharp market sell-off and fell just below the 5 billion won threshold that triggers mandatory advance disclosure under the Financial Investment Services and Capital Markets Act, which requires executives and major shareholders of listed companies to disclose trading plans 30 days ahead if their cumulative transactions over the preceding six months exceed that amount.

Market watchers read the timing as calculated, as Chey kept the purchase size under the disclosure threshold while moving quickly to buy during the sell-off.

The purchase was widely read as a vote of confidence in the chipmaker and an exercise in "responsible management," coming after SK hynix shares had fallen for three straight trading days. Chey reportedly concluded the stock had become significantly undervalued and decided to buy the shares himself.

Chey had previously brushed off the stock's decline.

"Demand for memory chips will continue," he said. "The long-term trend is upward. Instead of buying and selling, simply holding the shares is a better way to preserve your wealth."

BY LEE JAE-LIM [[email protected]]