Samsung leader Lee calls on mgt to raise shareholder value

Samsung Electronics Co. set up a task force team dedicated to increasing its shareholder value last month, according to industry sources on Oct. 4.

The electronics giant’s Vice Chairman Jay Y. Lee is said to have called for the team's creation as the company’s stock nosedived from more than 80,000 won in December 2021 to the mid-50,000 won range in September.

Lee said he felt responsible for the plunging share price and the shareholders’ pain, and ordered his employees to quickly implement strategies to manage the stability of the stocks, sources said.

The new team is aiming to promote circumstances for the stock to recover to the 70,000 won range, where it remained in January of this year.  

The sources said Samsung’s management believes that the stocks are significantly undervalued compared with the corporate value, even considering unfavorable factors such as a slowdown in consumer spending, the market recession and the Federal Reserve’s interest rate hikes.

“Shares have steadily dropped despite our efforts to grow competitiveness via new investments in semiconductors and M&As. Therefore, we’ve decided to take an action to recover the stock price,” a Samsung official said.

Samsung has seen its minority shareholders with common shares increase during the first half of 2022. The number of shareholders rose 16.9% from 5.07 million at end-December 2021 to 5.92 million at end-June.  

The task force team is expected to review multiple plans such as dividend increases, distribution of special dividends, share buybacks and stock retirement.

The team will set up the plans considering that it is difficult to expect a rebound in earnings or improvement in market conditions until early 2023, sources said.

Hitting a record-high 96,800 won on Jan. 15, 2021, Samsung Electronics stock dropped to a 52-week-low 51,800 won on Sept. 30, 2022. The company's market capitalization plunged by more than 220 trillion won to 317 trillion won during the same period.

Shares closed at 55,200 won on Oct. 4, up 3.95%.

Write to Ji-Eun Jeong at jeong@hankyung.com
Jihyun Kim edited this article.