SK Hynix listed on Nasdaq last Friday, closing up nearly 13% on its debut day, with its market cap surging to $1.22 trillion, surpassing Micron. Many friends are asking if they should chase it.

My view is simple: wait a bit longer, no need to rush.

First, the premium is too high. SK Hynix closed at 2.18 million won in the Korean market last Friday, which translates to about $145 per ADR. However, the ADR closed at $168—a premium of over 15%. The same thing is 15% more expensive to buy in the US than in Korea. Are you willing to pay that premium?

Second, the debut day sentiment was too hot. It opened at $170, hit a high of $177 intraday, with a gain of nearly 19%. This kind of debut day frenzy often involves a lot of short-term capital and sentiment-driven trading. Wait for the hype to cool down and for the shares to change hands; the price might become more reasonable.

Third, wait for index inclusion. Goldman Sachs expects the ADR to potentially be included in the Philadelphia Semiconductor Index and the Nasdaq 100 after listing, which would bring sustained buying from passive funds. But that's for later; there's no need to rush in at the peak.

SK Hynix is a good company, with a global HBM market share exceeding 57% and an operating profit margin of 72% in the first quarter. Its fundamentals are solid. But a good company also needs a good price.

Wait for a pullback, wait for the premium to narrow, wait for the sentiment to cool. It will be much more relaxed to act then.

$SK Hynix(SKHY.US) $Micron Tech(MU.US)