South Korean microchip company SK Hynix (SKHY) has announced that it will buyback $29 billion U.S. of its own stock over the next three months.
The share repurchase program will begin on Aug. 20 and is being undertaken as management at SK Hynix feels the company’s stock is undervalued.
SK Hynix, which makes the microchips and semiconductors fueling the artificial intelligence (A.I.) boom, also said that it plans to return more than 50% of its free cash flow to shareholders.
In a news release, SK Hynix said that the company’s value and future growth prospects are “not fully reflected in its current stock price.”
SK Hynix’s stock has been volatile since the company listed its shares in New York on the Nasdaq (NDAQ) exchange in July of this year.
Since its Nasdaq debut, SKHY stock has declined 7%.
The company’s stock has also gotten caught up in the debate over how long the A.I. trade will last and whether we’re currently in a A.I. bubble that is at risk of bursting.
However, in its native South Korea, SK Hynix’s stock has gained 122% this year amid a boom in the stocks of chipmakers and companies associated with the A.I. infrastructure buildout.
SKHY stock is up 4% in early trading on Aug. 19 following news of the stock buyback. The shares are currently trading at $161.80 U.S.
