Samsung Electronics Delays Shareholder Return Plan, Stock Falls 6.6%

Huo Xing Cai Jing reports that on October 29, Samsung Electronics’ shares erased earlier gains and plunged as much as 6.6% after investors were disappointed by the lack of a new shareholder return plan in its earnings report. Samsung Electronics stated it will announce the plan by the end of January. This contrasts sharply with SK Hynix, which on Wednesday not only reported strong earnings but also announced plans to return approximately $45 billion in additional capital to shareholders. Additionally, weaker-than-expected profits from Samsung’s chip business and increased capital expenditures further dampened market sentiment toward the company. Josh Gilbert, an analyst at eToro, said that forcing the market to wait until January for a full return plan creates a gap where positive news was expected. Samsung has also raised its capital expenditure by about 60% this year, so until it clarifies how this windfall will be allocated between new capacity and shareholders, the actual amount that will flow back to investors remains a genuine question. Rob Li, managing partner at Amont Partners, said delaying the details of shareholder returns until January is disappointing and gives stock traders an excuse to rotate capital toward SK Hynix or Micron over the coming months, as the other two companies offer clearer paths for shareholder returns.