Samsung plans to boost shareholder value by cancelling $2 Billion in stock
Samsung Electronics has been facing some tough times lately. Shareholders are not thrilled, as the company’s stock value has dropped by almost 23% in the last year. This is especially noticeable when you compare it to competitors like SK Hynix, which has been doing much better.
To try and make shareholders happier, Samsung has decided to cancel $2 billion worth of its shares. This isn’t the first time; Samsung has been buying back its shares for a few years now to give more value back to its investors.
More Buybacks on the Way
Samsung just announced they’re not stopping there. They plan to buy back another $2.08 billion in shares. This will happen on the Korea Exchange, starting from February 19th until May 16, 2025. They will buy back 48,149,247 common shares and 6,636,988 preferred shares. By doing this, they hope to make each remaining share worth more since there will be fewer shares out there.
The news of this cancellation and new buyback has already pushed Samsung’s stock up by over 1.5%.
What Happens Next?
Some of these shares will go towards rewarding employees through a stock compensation program. Others will be kept by Samsung to help keep the stock price stable when needed. Despite these efforts, Samsung’s stock hit a low not seen in four years back in November 2024, while SK Hynix enjoyed a 30% increase in stock value that year. While buying back shares might help in the short term, investors are really looking for signs that Samsung’s businesses, especially the semiconductor division, are turning around before they expect the stock to soar again.
