Samsung building

Samsung Electronics Buying Back $2 Billion in Shares

November 26, 2014 - Written By Cory McNutt

Let’s face it…the year has not been good to Samsung as profits continue to spiral downward.  The company is getting pressure from all sides – the customers are demanding more innovative devices, the executives within the corporation, as it looks like there may be some major changes and from the stockholders and investors upset about the decline in profits.  These people are used to big dividends from Samsung as they grew to become the largest worldwide manufacturer and seller of smartphones and tablets.

The past couple of years have not been kind to Samsung with regards to the smartphone industry.  This has happened for several reasons, not the least of which is that market saturation of high-end smartphones is finally catching up after all of these years.  The Chinese factor is also a major cause – the two most promising areas for sales growth are China and India, but they are producing high quality devices for a very competitive price and are taking the markets by storm as Samsung loses sales.  Samsung also has too many devices that have to be an inventory and manufacturing nightmare to keep track of that many different displays manufactured and in stock – look at how many different cameras are on their devices.

This is also very confusing to customers that never know which model to choose.  They also need to listen more closely to their customers’ ideas – one of the reasons Xiaomi is so successful – and incorporate them into their new designs.  Everybody but Samsung knew that their Galaxy S5 would not sell well as they gave us the same old thing – no QHD display, no metal, no 3GB of RAM, no dual speakers, no dual-tone LED flash and no OIS.

In an effort to help appease the shareholders and stabilize its share price, Samsung Electronics Co Ltd announced that they would buyback $2 billion of their stock shares – the first time since 2007.  The buyback will consist of 1.65 million common shares and 250,000 preferred shares…in essence, boosting the value of the stock for shareholders.  This follows similar buybacks earlier this month by Hyundai Motor Co and its affiliate Kia Motors in order to enhance their share value.  Samsung shares are down 12.5-percent in 2014 compared to only a 1.5-percent decrease across the market.

Please hit us up on our Google+ Page and let us know what you believe Samsung is doing wrong…as always, we would love to hear from you.

Samsung Stock Prices 2014