Why Amkor (AMKR) Stock Is Falling Today

Max Juang /
2023/09/07 11:51 am EDT

What Happened:

Shares of semiconductor packaging and testing company Amkor Technology (NASDAQ:AMKR) fell 9.27% in the morning session after the company announced the launch of a secondary offering of 10 million shares of common stock by selling stockholders (915 Investments, LP). Note that the company's total base of shares is roughly 250 million. 915 Investments is an investment vehicle for members of the family of James J. Kim, the founder and executive chairman of the board of Amkor, and Susan Y. Kim, the executive vice chairman of the board. Following the sale, members of the Kim family and their affiliates will continue to own a majority of Amkor's shares. 

A secondary offering is when existing shareholders sell their shares to new investors. In the case of Amkor, the secondary offering is not being done by the company but by selling stockholders. This means that Amkor will not receive any proceeds from the sale. However, the offering could still have a negative impact on the company's stock price, as it could signal that existing shareholders believe the stock is overpriced or are not confident in the company's future prospects. This is not always the case, just a possibility.

The stock market overreacts to news, and big price drops can present good opportunities to buy high-quality stocks. Is now the time to buy Amkor? Access our full analysis report here, it's free.

What is the market telling us:

Amkor's shares are quite volatile and over the last year have had 17 moves greater than 5%. In context of that, today's move is indicating the market considers this news meaningful but not something that would fundamentally change its perception of the business.

Amkor is down 9.58% since the beginning of the year, and at $23.03 per share it is trading 25.8% below its 52-week high of $31.03 from January 2023. Investors who bought $1,000 worth of Amkor's shares 5 years ago would now be looking at an investment worth $2,950.

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