While Samsung currently isn't having the best of times given the fact that it's handling a huge Galaxy Note 7 recall whose negative impact on the company's brand and finances is yet to be truly determined, the South Korean tech giant's shareholders still have something to be happy about. That'd be the fact that the consumer electronics manufacturer has just reported that it has significantly increased its cash reserves as the company is currently keeping 77 Trillion Won or $69.1 Billion in cash reserves. This is a record-high amount of cash holdings for the firm that can mostly be attributed to the fact that Samsung recently sold the securities it had in four tech companies which raised close to $900 million in cash in addition to selling its printing division to HP which paid over $1 Billion for it.
This is a 7.8% increase in cash holdings in comparison to Q4 2015 and analysts are expecting that Samsung will continue with its current strategy of focusing on its core business while selling off less profitable and more niche divisions in order to increase the amount of liquid reserves it has even further in the coming months. While all that cash, short-term financial instruments, liquid assets, and cash equivalents are definitely impressive, one might ask why is it a good thing for the company to simply pile up money? Isn't the main purpose of any business investing money in order to make even more money? Doesn't cash actually lose value with time due to inflation?
The answer to both of these questions is a definite "yes" but note that Samsung isn't planning on sitting on that pile of cash for a long time. Namely, the company is planning to soon use a significant portion of its reserves to invest into emerging and bleeding edge tech firms in order to consequently drive growth in the industry. In addition to that, the South Korean tech giant is also likely to improve its dividend policies by the end of the year, at least if it wants to fulfill its 2015 promise. All-in-all, it's expected that a major portion of this growing pile of reserve money and other liquid assets will soon be injected back into the industry and returned to the shareholders.