Samsung Shares Up After It Announces Share Buyback Program

Aiming to enhance shareholder value, Samsung Electronics Co Ltd’s $7.17 billion share buyback programme began on Monday. In 2017, the company repurchased shares worth $14.81 billion.

Meanwhile, the market reacted positively as the shares of Samsung Electronics jumped more than 7% on Monday, marking its largest daily gain since March 2020, after hitting its lowest point since mid-June 2020.

The share repurchase program will be carried out in phases over the next 12 months and this decision was revealed in a regulatory filing submitted after the market closed on Friday (15 November 2024).

In the buyback plan approved by the board of directors, the company will repurchase $2.14 billion in stock and all of the shares will be cancelled in the next three months. This buyback will begin from 18 November 2024 to February 17 2025 and will comprise of 50.14 million common shares and 6.91 million preferred shares, the company said.

The remaining shares valued $5.13 billion in the repurchase program will be authorised accordingly by the Board, which will decide on ways to enhance shareholder value, including when and how to use the treasury shares.

The second share buyback programme followed the company’s announcement of the third quarter results in which Samsung revealed that its semiconductor business faced challenges, including a significant 40% q-o-q profit decline.

Samsung Electronics achieved record-high revenue of $57.35 billion, fuelled by strong sales of high-end memory chips and new smartphones. However, its semiconductor business encountered difficulties, with operating profit in the Device Solutions (DS) Division dropping to $2.76 billion, due to rising costs and losses in foundry and system chip segments.

Despite these struggles, Samsung’s memory chip sales exceeded expectations, particularly in AI-driven products like HBM and DDR5. Samsung plans to expand its high-end memory offerings and improve its 2nm foundry processes, focusing on AI and HPC markets.

Delisting from Luxembourg Bourse

Samsung Electronics which was listed on the Luxembourg Stock Exchange in 1991 through issuance of Depository Receipts (DRs) representing preferred shares in order to facilitate transactions for overseas investors, decided to delist from Luxembourg Stock Exchange from November 6.

These DRs representing preferred stock, will be transferred from the Luxembourg Stock Exchange to the London Stock Exchange.

Although the DRs are being delisted in the Luxembourg Stock Exchange at this time, overseas investors will continue to be able to trade the preferred share DRs as they will be listed on the London Stock Exchange.

Furthermore, the holders of preferred share DRs can freely exchange their DRs for the underlying preferred shares if they so wish, in accordance with the previous terms, Samsung said.