Samsung to Consider Hedge Fund Request to Split Up Company

In the world of smartphones, it has often been a case of "Apple vs Samsung" when talking about the battle for the number one spot globally, and while that's still the case, Samsung is a much bigger deal than just a mobile company. Samsung is a major player in the TV business, consumer electronics and a whole lot more. The entire Samsung Group is involved in the South Korean economy throughout sectors such as construction and even military contracts. To say that Samsung is a big deal in South Korea would be a massive understatement. Samsung Electronics, the firm responsible for their mobile devices like the Galaxy S7 Edge, is often referred to as the crown jewel of the Samsung Group, and it's this part of Samsung that was recently given a proposal to split the company and float on the US NASDAQ. Samsung now appears to be considering this request.

The request in question came from Elliot Associates, a major hedge fund that, along with associate companies Blake Capital and Potter Capital, hold a 0.62 percent of Samsung Electronics. The firms requested that Samsung Electronics be broken up into holding and operating companies, and that the main company float on the US stock exchange, too. Given that these firms hold such a small part of Samsung Electronics, it's a wonder that the South Korean giant has responded, until we see that the request clearly had a positive impact, as Samsung's shares rose 5 percent. Samsung has said, in an official statement, that "Elliott is one of Samsung Electronics’ shareholders, and we will carefully consider a shareholder’s request".

It's unclear as to whether or not Elliot Associates, is only looking for some more cash out of Samsung, as the firm has also requested that Samsung pay dividends of up to $27 Billion. It's more likely, however, that Elliot Associates, as well as those that agree with the hedge fund, feels that Samsung is undervalued and that they want to see better return on their investment. Whether Samsung is to agree to these changes is perhaps unlikely, as Samsung is a major part of the South Korean economy, and for them to float on the NASDAQ could be seen as a loss for the South Korean economy. A shareholder's meeting is likely to place with this put up for discussion, but it's perhaps unlikely something like this will be happening any time soon.

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Tom Dawson

Former Editor-in-Chief
For years now I've had a heavy interest in technology, growing up with 8-bit computers and gaming consoles has fed into an addiction to everything that beeps. Android saved me from the boredom of iOS years ago and I love watching the platform grow. As an avid reader and writer nothing pleases me more than to write about the exciting world of Android, Google and mobile technology as a whole.