Samsung Electronics Co., Ltd. (BC94) Announces Its 2nd Biggest Share Buyback Ever

Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930) stated that it will buyback $2 billion of its share, which is its first since 2007 and second largest buyback ever. The move follows constant call from investor for higher returns in the face declining profits.

Create value for investors

In its regulatory filing, the Korean company has stated its decision to buy back 1.65 million common shares and 250,000 preferred shares to alleviate and increase value for shareholders.

Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930) that it will offload its stakes in Samsung Techwin Co Ltd and Samsung General Chemicals Ltd for 761 billion won ($687.98 million) as a part of a broader Samsung Group divestment from defense and chemical arms. Samsung Electronics sits on the cash pile of 66.95 trillion won in cash and equivalents at the end of the third-quarter.

Samsung’s buyback comes after Hyundai Motor Co performed a similar action last month, and affiliate Kia Motors Corp. The South Korean company has taken the decision to stabilize pressure and return more capital to the shareholders.

Samsung may sack mobile chief

Recently, a report in Forbes noted that the sales of Samsung Galaxy S5 is slowing, and stated that this will be faced by every smartphone company eventually. The report notes that Apple was able to escape the problem by changing the size of the iPhones. Samsung’s President of the UK and Ireland Andy Griffiths said that the low sales of the Galaxy S5 cannot be avoided, and much will depend on the new ideas and R&D at Samsung.

Samsung Electronics Co., Ltd. (LON:BC94) (KRX:005930) is advancing towards posting its worst annual profit in three years on the back of declining market share in its smartphone business, also its share price has been declining sharply. Share price dropped 12.5% in 2014 compared with a 1.5% decline for the broader market. Samsung could apparently hike the dividend payouts this year to further increase investor’s confidence, although the company has not yet revealed any plans.

Samsung has taken the decision just before its annual personnel announcement, which is expected to be held in early December. Marred by the cold smartphone performance this year, the company is expected to take some major decisions such as the probable sacking of company’s mobile division chief J.K. Shin.