Samsung jumps most in nearly 5 years after announcing new buyback

Investing.com -- Samsung Electronics shares surged 7.2% on Friday, marking their largest daily gain since March 2020, after the company unveiled a major share buyback plan aimed at boosting shareholder value.

The announcement follows concerns over the company’s semiconductor business, which has faced declining profits in recent quarters.

In a regulatory filing released after markets closed, Samsung (KS:005930 ) said it would repurchase shares worth 10 trillion won ($7.17 billion) over the next year.

The first phase, valued at 3 trillion won, will take place in the coming three months, covering 50.14 million common shares and 6.91 million preferred shares. Samsung plans to cancel these shares to enhance value for existing shareholders.

The company’s board is set to decide how to deploy the remaining 7 trillion won from the buyback program, the first of its kind since 2017 when Samsung completed a 20.7 trillion won repurchase.

Samsung’s move comes amid a challenging period for its semiconductor division, which saw profits plunge by 40% quarter-over-quarter. However, the company has emphasized its focus on high-end chip production and progress in securing a major supply deal, signaling confidence in its long-term strategy.

Friday’s share price rally saw Samsung rebound from its lowest levels since June 2020. Despite the significant daily jump, the stock remains down 32% year-to-date, reflecting broader investor caution over the tech sector.

The buyback announcement is widely seen as a bid to restore investor confidence and reaffirm the company’s commitment to shareholder returns.

Source: Investing.com