Hyperliquid SKHY ADR premium widens to 33.3% as whale's convergence arb remains underwater

Huo Xing Finance reported that on July 23, Hyperliquid's SKHX was quoted at $1,321 and SKHY at $176.09. With a 10:1 conversion ratio, 10 ADRs imply a value of $1,760.90, putting the ADR at a 33.3% premium to the Korean stock price. Since SKHY listed on July 10, the premium has held based on the two contracts' daily closes, ranging from 16.45% to 33.30% (lowest on July 11 and highest on July 17). It has now returned to the top end of that band. Hyperinsight data show whale address 0x2ab3 is positioned for premium convergence, long the Korea leg and short the U.S. ADR, with combined exposure of about $29.058 million: - SKHX (10x long): 12,000 contracts, notional ~ $15.852 million; average entry $1,280.70; unrealized profit ~$482,000; liquidation price $1,093.70. - SKHY (10x short): 75,000 contracts, notional ~ $13.206 million; average entry $167.20; unrealized loss ~ $660,000; liquidation price $208.90. Using the current average entry prices, the implied ADR premium at inception was about 30.61%. The premium has since widened by 2.69 percentage points, leaving losses on the ADR short larger than gains on the Korea long and producing an estimated net loss of roughly $177,600. Funding rates show both legs currently cost to hold. If positions and rates stay unchanged, the combined carry is about $716.53 per hour, or roughly $17,200 per day. The whale actively managed the spread today. From morning to noon, it closed about $16.0484 million in combined exposure, with API closedPnl showing a total loss of $180,800. Later, it reopened about $9.0121 million, including $4.5578 million in SKHX longs and $4.4543 million in SKHY shorts. At the time of the snapshot, there were no open orders. As context, using TSMC as a benchmark, the current ADR premium is about 6.96%. Hynix's current ADR premium of 33.49% is around 4.8 times higher, close to fivefold. Historically, TSMC's ADR premium approached 90% during the dotcom bubble; even around its June 2000 ADS issuance, the issuance premium was still 43%.