The 'Optical Illusion' of SK Hynix Ascending to No. 1 in Market Cap... Samsung Electronics Still Has a Higher Market Cap

On the 22nd, multiple media outlets reported that "SK Hynix surpassed Samsung Electronics to become No. 1 in KOSPI market capitalization for the first time in 25 years and 7 months." According to the reports, SK Hynix's market capitalization exceeded 2,088 trillion won, pulling ahead of Samsung Electronics (2,084 trillion won). However, this is an "optical illusion" caused by misreading the original concept of 'market capitalization,' which evaluates corporate value.

A company's market capitalization is calculated by multiplying the stock price by the number of issued shares, meaning the total sum of stock value including both 'common shares' and 'preferred shares'. However, recent media reports omitted Samsung Electronics' massive scale of preferred shares and compared only common shares, reporting as if the ranking of the entire corporate market capitalization had been reversed. Even by just looking at the statement of financial position in the financial statements, a company's capital components consist of 'common stock capital' and 'preferred stock capital'. Common stock is not seen as the sole capital component.

Calculating strictly based on the provided actual data, the result is completely different. As of the 22nd, even if simply calculated at the day's 'lowest price (common stock 342,000 won, preferred stock 213,000 won)' for Samsung Electronics' common shares (approx. 5.91963 billion shares) and preferred shares (approx. 815.97 million shares), Samsung Electronics' total market capitalization reaches approximately 2,322.6311 trillion won. On the other hand, when calculated based on the day's 'highest price (2,945,000 won)' for SK Hynix's common shares (approx. 712.7 million shares), the market capitalization is about 2,098.9084 trillion won.

In other words, even applying the most unfavorable daily low price for Samsung Electronics and the most favorable daily high price for SK Hynix, Samsung Electronics' actual market capitalization is still ahead of SK Hynix by approximately 223.7227 trillion won.

Of course, if looking solely at the common stock market capitalization, it is true that SK Hynix, riding on the AI semiconductor boom and its High Bandwidth Memory (HBM) competitiveness, has caught up to or temporarily surpassed Samsung Electronics. The 349% surge in SK Hynix's stock price compared to the beginning of this year is a performance well worth noting in the market. Some articles did add a caveat in the text stating, "If Samsung Electronics' preferred shares are included, Samsung Electronics still leads in total market capitalization." SK Hynix's remarkable recent stock price upward trend certainly deserves applause, but if the original financial standard of market capitalization is strictly applied, the No. 1 in market cap is still Samsung Electronics.