Seoul investors watch Nasdaq buyers pay a premium for identical stock and politely say nothing
SK Hynix Shares Cost More in America Because Everything Does
SEOUL – Financial authorities on two continents confirmed this week that American investors are paying roughly 41 percent more than Koreans for the exact same piece of the exact same chipmaker, a gap that analysts in Seoul have described as “the most successful Korean export since fried chicken.” According to Asia Times reporting on the SK Hynix price gap, the American depositary shares closed at 184.15 dollars on the Nasdaq on September 30, while the slice of a Seoul share each one represents was worth about 130.88 dollars at home. The difference is 40.7 percent, or in retail terms, the airport price.
Korean retail investors, known locally as ants, greeted the news with the quiet dignity of a man who has just watched a tourist pay nine dollars for a bottle of water. “We are not laughing,” said Park Dong-hyun, deputy director of the Yeouido Bureau of Overseas Enthusiasm, who was laughing. “We simply note that the share is the same share. It has the same factories. It has the same memory chips. The only added feature in New York is the feeling of having discovered it yourself.”
The Korean Discount Finds Its Natural Opposite
For decades economists have studied the so-called Korean discount, the stubborn habit of Korean companies trading for less than their overseas rivals. Scholars blamed governance, family conglomerates and a peninsula with a complicated neighbour. Nobody considered the simpler explanation, which is that the same product will always cost more once it has been placed on a shelf in America with better lighting. Ten depositary shares equal one Seoul share. An American who buys ten of them has purchased one Korean share and a 500 dollar convenience fee for not having to open a Korean brokerage account, a process widely understood to require three forms of identification, a local phone number and a grandmother in Daegu.
A survey by the Hangang Institute for Avoidable Costs found that 68 percent of American buyers believed the premium was “for shipping.” A further 19 percent believed they were paying extra for the English-language version. The remaining 13 percent said they did not know what SK Hynix made but that a man on a podcast had said the word “memory” eleven times in a row and they felt it was a sign.
What the Premium Actually Buys
Brokerage houses in Seoul have begun itemising the American surcharge for curious clients. The Bureau of Overseas Enthusiasm released the following breakdown on Thursday:
- 12 percent: the comfort of a ticker symbol made of letters
- 9 percent: not having to learn what a won is
- 11 percent: trading hours that do not require an alarm at 8 p.m.
- 8.7 percent: the general excitement of artificial intelligence, applied liberally
“The last item is the important one,” said Park. “The Americans are not buying a chip company. They are buying the idea that somewhere a computer is thinking, and that the thinking is stored on something. We make the something. They pay for the thinking.”
Seoul Considers Selling Other Things Twice
The success of the arrangement has not gone unnoticed in government. A working group at the Ministry of Things We Already Have is reportedly studying whether other Korean assets could be repackaged for the American market at a 41 percent mark-up without changing them in any way. Early candidates include the Seoul subway, which is punctual, and the concept of finishing a building on schedule. Elsewhere in the region, the mood is less cheerful. As Asia Times notes in its analysis of why China is missing the big AI rally, artificial intelligence fever has lifted Seoul, Taipei and Tokyo while Chinese shares sit in reverse, meaning there are entire markets where nobody will overpay for anything at all.
Arbitrage traders, whose entire profession consists of noticing when one thing has two prices, said closing the gap is harder than it looks. Converting shares between the two markets involves rules, quotas and a quantity of paperwork that one Hong Kong desk head compared to “adopting a child in three jurisdictions.” Until that changes, the premium stands as a monument to human optimism and the enduring power of not checking the price next door.
A Familiar Story for British Readers
The episode has drawn sympathy from London, where paying more for the same thing is considered a founding civic value. Editors at the British satirical news desk of The London Prat observed that a pint in Zone 1 has traded at a 41 percent premium to the same pint in Zone 4 since records began, and nobody has ever called it a market inefficiency. Readers who follow satirical news from London will recognise the pattern at once: the product is identical, the postcode is different, and the buyer goes home pleased.
At the close of trading on Friday, Park was asked whether Korean investors felt any guilt about the arrangement. He considered the question for some time. “Guilt is also available,” he said, “but in New York it is 41 percent more.” Bohiney Magazine and prat.uk continue to monitor the spread from a safe distance and at the local price.
SOURCE: https://bohiney.com/
