**[Analyst: SK Hynix ADR Premium Is Another Sign of Overheated AI Trading]** According to a report by Jinse Finance, *Wall Street Journal* senior market columnist James Mackintosh stated that since SK Hynix ADRs were listed in the U.S. two weeks ago, the premium between the stock traded in Korea and the U.S.-listed ADRs has surged to between 16% and 51%. This is another sign of overheated AI trading and reflects the market's "tendency to overpay for memory chip stocks." The significant ADR premium is a typical anomaly that should not occur in the market. Mackintosh explained that the restriction on converting SK Hynix's underlying stock into ADRs poses an investment risk. In a typical ADR scenario, the 29% premium observed last Friday (July 24) would prompt hedge funds to buy the stock in Korea, convert it into ADRs, and simultaneously short the ADRs in the U.S. However, he warned that since conversion is not feasible, further expansion of the premium could lead to substantial losses. If the underlying stock and ADRs were freely convertible, investors would buy the cheaper underlying stock (go long) and sell the more expensive ADR (go short), narrowing the premium. But due to the difficulty in converting the underlying stock into ADRs, the price gap persists. Furthermore, if the premium continues to widen, hedge funds borrowing stock to short may face even greater losses. Mackintosh also compared TSMC (Taiwan Semiconductor Manufacturing Company) with SK Hynix, pointing out that the current premium level of SK Hynix ADRs is excessively high. Since the launch of ChatGPT in 2022, TSMC's average premium has been 15%, indicating that U.S. investors are willing to pay significantly higher prices than their Taiwanese counterparts. However, the higher premium for SK Hynix suggests that the demand in the U.S. market is excessively frenzied. If Korean stock prices rise and the premium narrows, ADR buyers might fare well, but if the company uses U.S. depositary shares as a financing tool, they could incur losses. If semiconductor stock prices in both Korea and the U.S. plummet and the premium narrows, the losses will be even greater. In short, unless SK Hynix's stock price rises, the current premium in the market is likely to result in losses for investors buying ADRs in the U.S. (*Jin10*)