We reported last Friday that Samsung may be looking to purchase a large stake in Best Buy, but it seems that is not the case. Even though Samsung vice chairman Lee Jae-yong has discussed how he "recently met with senior executives at Best Buy and discussed pending business issues," it seems that those "pending business issues" won't involve Samsung buying Best Buy stock. Shortly after we reported on this rumor Friday, Samsung came out on their blog and sent out emails that said:
"In the past few days, there have been reports that 'Samsung is considering to acquire stakes in Best Buy'. Please take note that these rumors are not true. There have been no talks whatsoever regarding stock acquisition of either company."
Samsung has already partnered with Best Buy to open the Samsung Experience Shops. These Samsung shops have been opening in stores all over the US. The Experience Shops give consumers a place to check out Samsung products hands-on before they buy. It gives Samsung exclusive space to demo their products and services inside Best Buy retail stores.
Samsung recently estimated a $9.3 billion operating profit for Q3 of 2013. They have money to spend, but Samsung apparently wants to spend it in ways that don't involve purchasing a large portion of Best Buy stock. A large part of Samsung's profits come from its smartphone business, but analysts are projecting that profits from the smartphone market are going to decrease in the next few years. Samsung obviously wants to remain the top Android manufacturer. They are going to be looking for other ways to continue to make money at this level. The meetings between Samsung and Best Buy executives prompted these rumors of a large Best Buy stock purchase. When Kim Young-woo, an analyst from HMC Securities, mentioned that "Samsung has been considering increasing subsidies paid to Best Buy in a strategic move to help the retailer and also increase the exposure of its products" the internet exploded with how this move could be good for Samsung and what it might mean for Best Buy. Samsung is flat-out denying the rumors.