SK hynix will buy 24.07 million of its own shares and destroy them, and the daily purchase limit the board set for itself is well above what the liquidity test alone would have allowed

Forty trillion won. That is what the board of SK hynix resolved on 19 August to spend buying its own common shares, every one of which it intends to destroy rather than hold.

The company furnished three separate reports to the Securities and Exchange Commission the same day, and between them they set out the mechanics with unusual precision. The cancellation filing puts the number of common shares at 24,070,000 against 730,492,365 issued, which is 3.295 percent of the company. The estimated aggregate value is 40,004,340,000,000 won. Buying runs on the open market from 20 August to 19 November through SK Securities, and the company says it will cancel everything acquired in a single batch once the buying is finished.

Six independent directors were present. None was absent.

The share count is arithmetic rather than a target. The filing says it was reached by dividing the money by the closing price on the day before the resolution, 1,662,000 won on 18 August, and warns that the actual number cancelled will move with the price. None of the filings gives a dollar figure.

The number that is not in the headline

The acquisition filing sets a maximum daily purchase order of 2,407,000 common shares, and shows its working. Korean disclosure rules cap the daily order at the lesser of two things: the greater of ten percent of the shares reported for acquisition or a quarter of the average daily trading volume over the preceding month, and one percent of shares issued. Ten percent of the programme is 2,407,000 shares. A quarter of the recent average daily volume is 1,431,989 shares.

The ten percent figure won, so the cap is set by the programme's own size rather than by the depth of the market. Read the second number backwards and the average daily volume it implies is 5,727,956 shares, which makes the daily ceiling about 42 percent of ordinary turnover in the stock. Spread evenly across the roughly sixty five trading days in the window, the programme needs only about 370,000 shares a day. The gap between those two figures is the discretion the board has taken.

What the company says it is doing, and what it has already done

In a separate fair disclosure filing, the company states that it considers its recent share price to be undervalued relative to intrinsic value, and that it is therefore acquiring and cancelling shares to reallocate capital and improve shareholder value. It raises the shareholder return target for the 2025 to 2027 policy period from within 50 percent of cumulative free cash flow to over 50 percent, and says dividends, including the existing fixed dividend and special dividends, are under review. Scale and method are to be settled at the third quarter results.

This is not the year's first cancellation. The acquisition filing's own treasury table shows the holding starting at 17,377,728 common shares, with 15,300,000 cancelled and 452,032 disposed of, leaving 1,625,696. Those remaining shares came back to the company in May, when it exercised the clean-up call on exchangeable bonds issued in April 2023.

The programme also sits inside the legal ceiling with room to spare. The same filing computes a total limit on treasury share acquisition of 89,448,011,686,863 won, built from net assets of 117,318,562,193,943 won at the end of fiscal 2025. Forty trillion won is 44.7 percent of that limit.

Under the proviso to Article 343, paragraph 1 of the Korean Commercial Act, the cancellation comes out of distributable profits, so the number of issued shares falls while stated capital does not change.

In its own release the company calls this the largest treasury share cancellation ever conducted by a South Korean listed company, and says net cash stood at about 69 trillion won at the end of the second quarter. Three weeks earlier the same board approved 35.2 trillion won for a second fab at Yongin and 19.1 trillion won for M17 at Cheongju.