Topline
Micron shares plummeted over 13% on Tuesday, falling as South Korea’s Financial Supervisory Service contributed to a global chip sell-off with a warning about risky ETFs tied to memory chip companies like Samsung and SK Hynix.
Micron’s stock is up more than 260% on the year.
Photo illustration by Cheng Xin/Getty Images Key Facts
Micron’s stock closed down 13.3% at $1,051.77, erasing two day’s worth of significant gains made by the stock Friday and Monday.
The drop came after Financial Supervisory Service Governor Lee Chan-jin said he regretted not blocking the launch of leveraged exchange-traded funds solely tracking Samsung and SK Hynix, noting their high-risk nature has not stopped retail investors from engaging with them.
Leveraged single stock ETFs are designed for short-term trading and can amplify daily price movements by two or three times, allowing investors to double or triple gains or losses in a single day.
The statement raised questions about whether Micron’s astronomical stock run this year was driven by momentum trading rather than fundamentals.
Micron has soared over 260% since the start of the year, when the company’s stock traded around the $300 mark.
This is a developing story. Check back for updates.
This article was originally published on Forbes.com