Samsung has faced increasing shareholder pressure due to its weak financial performance in recent years. As of Tuesday, February 18, its stock is down nearly 22% over the past year. In an effort to boost shareholder value, the company has been actively buying back shares. Now, to further support its stock, Samsung has announced plans to retire over $2 billion worth of shares.
Samsung to retire $2 billion in treasury shares, announces additional buyback
Samsung today announced its decision to retire 3 trillion won (approx. $2.08 billion) worth of treasury shares as part of its ongoing efforts to enhance shareholder value. The company will cancel 50,144,628 common shares and 6,912,036 preferred shares, each with a par value of 100 won. The share retirement is scheduled for February 20, 2024.
Samsung also announced plans to acquire 48,149,247 common shares and 6,636,988 preferred shares through open-market purchases on the Korea Exchange. The company will execute these buybacks between February 19 and May 16, 2025. The total acquisition cost could come at around 3 trillion won (approx. $2.08 billion).
The majority of these shares (2.5 trillion won) will be held for stabilizing the stock price and enhancing shareholder value. The remaining (about 500 billion won) will go toward employee stock compensation under the Restricted Stock Award (RSA) program. Samsung’s stock price increased over 1.5% following this announcement, reflecting positive investor sentiment.
However, analysts suggest that while buybacks and share cancellations may provide short-term support, long-term stock performance will depend on improvements in Samsung’s semiconductor division and other business segments. Samsung had previously announced a phased 10 trillion won treasury share buyback program over one year, with 3 trillion won worth of shares purchased and immediately retired within three months.
While Samsung’s recent actions signal its commitment to improving shareholder returns, investors will be watching closely for signs of recovery in its core businesses. The company’s ability to boost profits and compete with rising industry challengers will ultimately determine whether these financial maneuvers translate into sustained stock price gains.
