SK Hynix ADRs Trade at 16-51% Premium to Korean Shares, WSJ Columnist Warns

SKHY-6.39%
SKHYV-0.98%
According to James Mackintosh, Wall Street Journal senior markets columnist, writing on July 26, SK Hynix American depositary receipts (ADRs) trade at a 16-51% premium to the company's Korean-listed shares since their U.S. listing. Mackintosh attributed the substantial premium to a structural flaw: ADRs can be converted into Korean shares, but regulatory constraints make the reverse conversion difficult without company approval, eliminating the arbitrage opportunity that would normally narrow such price gaps. "U.S. investors are paying a premium for the convenience of trading in New York rather than seeking a broker to access Korean shares," he wrote.
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