Samsung Electronics ponders stock split to appease investors: executive

By on January 20, 2015

SEOUL Mon Jan 19, 2015 9:55pm EST

A man walks at the Samsung Electronics' headquarters in Seoul January 7, 2015. REUTERS/Kim Hong-Ji

A Man walks on the Samsung Electronics’ headquarters in Seoul January 7, 2015.

Credit Score: Reuters/Kim Hong-Ji

SEOUL (Reuters) – South Korean tech giant Samsung Electronics Co Ltd is bearing in mind a stock break up, a company government stated on Tuesday, as sliding profits put drive on the agency to maintain investors satisfied.

Samsung head of investor members of the family Robert Yi advised newshounds the company had been making an allowance for a inventory cut up for some time however it used to be too early to make a decision. A split would make Samsung shares more straightforward to purchase and could attract extra retail investors.

“We acknowledge the sentimental effect of a stock split, but how large an impact such an action can have on the company’s long-term value needs to be thought to be from numerous angles,” Yi said with out providing specifics.

South Korean shares are inclined to trade at a cut price to these somewhere else due to weaker company governance, difficult go-share holdings and low dividends.

The Sector’s top smartphone maker has launched a $ 2 billion share buy-back software and promised to increase its 2014 year-end dividend via as much as 50 p.c in a bid to carry its share price and placate traders.

Samsung shares remain smartly off final year’s peak of 1.495 million gained ($ 1,380) after a string of quarterly profit declines, though the purchase-back and deliberate dividend increase has helped them get better from multi-year lows.

The shares are still among of the most costly in South Korea according to the trading value.

In Addition To probably boosting trading volumes, a break up may additionally make the shares extra risky and invite greater investor scrutiny of the corporate’s efficiency.

Arch rival Apple Inc saw its shares turn out 37.7 % ultimate 12 months, thanks in part to a seven-for-one cut up.

Analysts said Samsung, a part of South Korea’s greatest domestic-owned conglomerate, may be cautious of using its share value too excessive because the crew prepares for a generational trade in management.

“A Higher share value will raise the inheritance tax burden Associated to Chairman Lee Kun-hee’s Samsung Electronics shares,” stated Chung Solar-sup, head of analysis firm Chaebul.com.

“There Isn’t Any incentive for Samsung Electronics to split the shares now.”

($ 1 = 1,083.5000 received)

(Reporting via Lee Changho and Se Yong Lee; Modifying by way of Tony Munroe and Stephen Coates)


Reuters: Know-how News

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