SK Hynix Rises About 1% Pre-Market, to Announce Shareholder Return Plan Wednesday; Two Leveraged ETFs Linked to Its ADRs to Be Liquidated and Delisted in November

TradingKey - On October 26, according to South Korea's Dong-A Ilbo, SK Hynix (SKHY) is considering paying a special dividend of approximately 16 trillion Korean won (about $12 billion), with the funds potentially coming from proceeds of selling its stake in Kioxia.

The company stated on the same day that it is studying various options to enhance shareholder returns and has not yet made a final decision, with plans to announce relevant measures on October 28.

Meanwhile, US asset management firm Tradr ETFs announced the liquidation of two leveraged ETFs tracking SK Hynix ADRs, namely the 2x Long ETF (SKHA) and the 2x Short ETF (SKHN). Both funds will cease trading on November 5 and are expected to complete liquidation around November 12.

As of press time, SK Hynix ADR was up 0.96% in pre-market trading.

[Source: TradingView]

$12 Billion Special Dividend Still Awaits Board Decision

SK Hynix is reportedly considering allocating about 80% of its investment gains related to Kioxia toward a special dividend. Media estimates value the investment gains at approximately 20 trillion won, suggesting the special dividend could reach 16 trillion won—exceeding seven times the company's total annual cash dividend for 2025.

SK Hynix issued a regulatory filing on the same day, stating that it is evaluating various options to enhance shareholder returns, though no final decision has been made. The company plans to disclose the relevant measures after review by its Board of Directors when it announces its third-quarter financial results on October 28.

SK Hynix previously committed to directing more than 50% of its cumulative free cash flow toward shareholder returns between 2025 and 2027, and it completed a 40 trillion won share buyback program ahead of schedule on October 21.

If approved, the special dividend would further expand the scale of shareholder returns, though the company must still balance cash reserves, HBM capacity expansion, and future capital expenditures. The detailed plan to be announced on October 28 will determine whether the special dividend rumors materialize.

Two SK Hynix Leveraged ETFs to Be Liquidated

Tradr ETFs announced the liquidation of two leveraged ETFs tracking SK Hynix ADRs, namely the 2x Long ETF (SKHA) and the 2x Short ETF (SKHN). Both funds will end trading on November 5 and are expected to cease operations and liquidate assets around November 12.

According to the Seoul Economic Daily, as of October 23, the two funds had combined net assets of approximately $1.3 million, having been listed for only about three months. Tradr stated that the liquidation decision was mainly related to fierce competition among similar ETFs, rather than a deterioration in SK Hynix's fundamentals.

Meanwhile, ProShares filed with the U.S. Securities and Exchange Commission on October 19 to withdraw registration filings for two leveraged ETFs originally planned to track Hyundai Motor and Samsung Electro-Mechanics. The two products were originally intended to provide twice the daily return of the underlying stocks, but ultimately did not move forward with listing.

SK Hynix Outlook Focuses on Shareholder Return Plan and Memory Demand

In the short term, SK Hynix's stock price will be influenced by its October 28 shareholder return plan and third-quarter results. If the company announces a special dividend with a payout size meeting market expectations, it could support the stock price; however, if the final plan falls below expectations, market reaction may be affected.

In the medium term, SK Hynix's stock price remains dependent on HBM demand, DRAM pricing, earnings performance, and capital expenditures.

Investors should focus on third-quarter financial results, future memory price trends, and whether the company can maintain necessary capacity expansion investments while enhancing shareholder returns.

The upcoming liquidation of two US leveraged SK Hynix ETFs is mainly tied to product operations and market competition, and should not be interpreted directly as institutional bearishness on SK Hynix. For investors, what is more important is whether the company can consistently deliver on earnings, cash flow, and shareholder return policies.