Samsung Electronics Shares Surge On Stock Buyback Announcement

South Korea: Shares of Samsung Electronics soared on 11 November 2024, following the company's announcement of a significant stock buyback plan worth approximately 10 trillion South Korean won ($7.19 billion) over the next 12 months. The stock jumped over 7 percent in Seoul, adding to a 7.21 percent gain on Friday after Samsung reached a preliminary agreement with its largest workers' union, which had been on strike since July.

Samsung Disclose Plans To Repurchase 3 Trillion Won Over Next 3 Months

This marks Samsung's first share buyback since November 2017. In a regulatory filing, the company disclosed plans to repurchase 3 trillion won worth of shares over the next three months, which will be cancelled afterward. The remaining 7 trillion won will be managed by the Board of Directors, with further decisions aimed at boosting shareholder value.

The buyback comes after Samsung's stock hit a four-year low on November 15, following weak third-quarter profit guidance and concerns about trade policies after the U.S. presidential election. The company has also faced challenges in keeping up with rival SK Hynix in developing high-bandwidth memory (HBM) chips, a critical component for AI leader Nvidia. Analysts note that Samsung has struggled to close the technology gap with SK Hynix, which became the first company to supply fifth-generation HBM3E chips to Nvidia earlier this year.

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HBM is a specialised form of dynamic random access memory (DRAM), widely used in laptops, workstations, and PCs, and is increasingly vital for AI and high-performance computing applications.