Hynix Falls on Concern Sale to Micron May Hurt Stock (Update3)
By Ian King and Heejin Koo
quote.bloomberg.com
Seoul, Feb. 15 (Bloomberg) -- Hynix Semiconductor Inc. shares plummeted, falling by as much as their daily limit, on concern that a sale of the company's assets to rival Micron Technology Inc. will reduce the value of its stock.
The stock declined for a second day, tumbling 15 percent to 2,015 won on concern that creditors will take all of the possible proceeds from a sale of its main business.
``Investors are worried what is left after the sale will not be able to generate enough income to remain viable,'' said Chung Doo Sun, who manages 250 billion won ($190 million) in equities at CJ Investment Trust Management Co. in Seoul.
Yesterday, Hynix Chief Executive Officer Park Chong Sup advised creditors against taking all of the proceeds -- likely to be paid in the form of Micron shares -- from a possible sale, saying that would make the deal ``very difficult.''
His comment sparked concern a sale of the company's memory- chip division, which supplies 70 percent of revenue, would leave investors with holdings in a company with less ability to generate revenue and profits.
Investors earlier purchased Hynix shares because they were inexpensive, although they were aware that the stock would take a beating if Hynix sold assets to Micron, Chung said. |
