Damn, a $29 billion buyback. SK hynix is really feeling the pressure.

Just a month ago, it went public in the US and raised $26.5 billion. At the time, the market's enthusiasm for AI was still at its peak, and the stock was flying like a rocket. Now, just one month later, it has turned around and pulled out $29 billion to buy back its own shares. Think about it: it raised $26.5 billion, then spent $29 billion buying itself back. However you calculate it, that's a loss. But SK hynix has no choice—without doing this, its share price would collapse.

Why would it collapse? Because the market has started to come back to its senses—how long can hardware spending on AI really continue? As soon as news emerged that Nvidia's growth was slowing, the entire semiconductor chain began to shake. As a major supplier of HBM chips to Nvidia, SK hynix was hit first. Investors had previously pushed its market cap above $1 trillion, putting it shoulder to shoulder with Samsung. But now? Leveraged trades are beginning to unwind, South Korea's Kospi index is moving like a roller coaster, and SK hynix's share price is falling along with it.

Put bluntly, this $29 billion buyback isn't generosity to "reward shareholders"; it's an unwilling "last-ditch rescue." What did analyst Josh Gilbert say? "A strong signal that meets investors' long-standing demands." Let me translate that: Investors had been shouting for ages, "You've made so much money—how about sharing some of it?" SK hynix kept pretending not to hear. Now that the AI bubble is about to burst, if it doesn't spend money to calm investors, institutions will flee.

Even more absurdly, Gary Tan of Allspring poured cold water on it directly: "Buybacks can only provide a temporary buffer; interest rates are the more important driving factor." Inflation hasn't come down, government debt is rising, bond yields remain high, and Iran is still at war. In this kind of environment, using $29 billion to buy back stock is like putting a Band-Aid on a gunshot wound. Is it really going to hold?

A month ago, when it went public and raised money, the market was still chanting, "AI will change the world." One month later, it has to use $29 billion in buybacks to prove that it "still has value." $SKHYV