Samsung Electronics Announces $7.2 Billion Share Buyback Plan

Samsung Electronics, a leading name in the technology sector, has announced a significant plan to buy back shares worth 10 trillion won, which is approximately US$7.17 billion. This decision, revealed in a regulatory filing after the market closed on Friday, aims to enhance shareholder value. The company intends to repurchase three trillion won worth of shares, translating to about 50.14 million common shares and 6.91 million preferred shares, within the next three months. These shares will subsequently be cancelled, as stated by Samsung in a separate announcement.

This marks the first time since 2017 that Samsung Electronics has opted for a share buyback, a move that reflects its commitment to boosting investor confidence. Back in 2017, the company repurchased shares worth a total of 20.7 trillion won. The board of directors is set to deliberate on additional strategies to enhance shareholder value, including the timing and method of utilizing the remaining seven trillion won in the repurchase program.

In recent months, Samsung has faced challenges in its semiconductor business, experiencing a staggering 40 percent drop in profits quarter-on-quarter. However, the company has expressed its focus on producing high-end chips and is reportedly making progress on a significant supply deal. This strategic shift aims to alleviate investor concerns regarding its semiconductor division.

Following the announcement, Samsung Electronics' shares surged by 7.2 percent on Friday, marking the largest daily increase since March 2020. This rebound comes after the shares had reached their lowest point since mid-June 2020. Despite this positive movement, it is important to note that the shares are still down by 32 percent year-to-date.

Samsung Electronics' decision to initiate a substantial share buyback program is a clear indication of its commitment to enhancing shareholder value amidst challenging market conditions. As the company navigates through its semiconductor challenges, this move could potentially restore investor confidence and stabilize its stock performance. For investors and market watchers, this development serves as a reminder of the dynamic nature of the technology sector and the importance of strategic decision-making in maintaining shareholder trust.