The latest Samsung flagship phone which has been received with a myriad of attention from the announcement to its release leading the company’s shares in a series of jumps and drops is now experiencing a higher high in their shares which leaped by almost 5% hitting a record
The recorded gain in the South Korean tech giant was led by the company’s announcement that they are considering a proposal from Elliott Management, a U.S. based hedge fund management firm to a special dividend and restructuring that would also lead the electronics company in line with their international competitors. Elliott Management also presented a proposal reportedly that they are suggesting a de-merger between the company’s corporate assets and the electronic company which will allow a wider Samsung listing in the stock market.
Elliott Management’s founder Paul Singer is a known shareholder of a 0.62 percentage of Samsung shares.
This can also lead to the company to have United States stock listing which might lead to the company being saved from a decline due to their dwindling smartphone sales led by the issues caused by the Samsung Galaxy Note 7 which either exploded or burst into flames from consumers all over the globe who have purchased the said unit.
According to the hedge fund firm, the tech giant from South Korea has the capability to create a special dividend due to its overcapitalization and an operating balance of almost $69 billion. The proposal also includes a 75 percent annual free cash flow return to its shareholders and a $27 billion special dividend.
At the moment, the issue of the exploding Samsung Galaxy Note 7 and the global recall of the said flagship phone is staring the company in the face and still continues to cause problems following a most recent report of replacement units smoking inside a U.S. plane. Since the most recent year, SSNLF shares have grown to almost 45% with a recorded decline of 4% in their August record.
This also comes next to Elliott’s failure a year back in their opposition against the merger between Samsung and Samsung C&T Corp with a claim that the Lee family gets a huge amount of advantage from the merger.
Announcement of Samsung’s consideration of the proposal from Elliott seemed to please investors as stocks jumped to 5% at Thursday’s early trading. Also according to Elliott, despite the growth in the company’s shares, the stock is still underrated at almost 70 percent. This is where the proposal from the firm comes in offering the stock a chance to level out with its top competitors by making their presence in a bigger market.
Samsung’s share gains also led some of their assets to jump with a gain in the shares of Samsung’s SDT Corp up in a span of seven months by almost 5.6%.
Despite the hedge fund firm’s ambitious proposal, Samsung’s initial response and openness to the idea has instantly garnered an instant response from their investors and shareholders alike. The 5% jump led the shareholders to shift their focus away from the Galaxy Note 7 issue for a while which shows their willingness to invest in the tech giant’s another attempt in creating better prospects for the company.