Samsung announces a $2 billion share buyback


Samsung has reportedly already taken the necessary steps to get itself back on its feet after several consecutive quarters of financial conundrums. After the numerous reports that it will cut down its product lineup for the upcoming year substantially so as to help customers discern its smartphones more easily, the giant will also might undertake a slight restructuring at the top of its headquarters, with the current head of mobile J.K. Shin in jeopardy of losing his executive position.

The latest step that the endangered giant will undertake is a $2 billion share buyback, which is a direct answer to numerous investors who have expressed their desire for higher returns of their invested capital. 

This is Samsung's second largest buyback, the first one since 2007. Some 1.65 million common and 250,000 preferred shares will be reacquired, with the hope to further steady the price of its shares and, additionally, improve the returns for its shareholders. Up until now in 2014, Samsung has seen its stock price fall down 12% (as a reference, the global market has only experienced a decline of 1.5% so far in 2014).


The weak sales of its flagship, the Galaxy S5, are among the main culprits for the unenviable situation over at Sammy's camp - reportedly, 40% less units of the Galaxy S5 have been sold in comparison with the Galaxy S4. That's way we've already heard numerous rumors and speculations that the next flagship smartphone that will proudly bear the Samsung logo at its front, the Samsung Galaxy S6 (also known as "Project Zero"), will be designed from the ground up. This can potentially help Samsung re-establish its position as a global leader and get back in the black.

source: The Wall Street Journal

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8 Comments

1. HugoBarraCyanogenmod

Posts: 1412; Member since: Jul 06, 2014

At least a better solution than overspending ads

2. fouadqr

Posts: 326; Member since: Nov 21, 2012

How?.

4. tiara6918

Posts: 2263; Member since: Apr 26, 2012

They now need to reduce their ads so they can gain more profit

8. mixedfish

Posts: 1562; Member since: Nov 17, 2013

Their falling profits are from the increasing rate of falling revenues (ie low GS5 sales), the increasing expenses can be barely attributed to it (ie +1billion on ads). Derp, do you just respond to articles without understanding?

5. rd_nest

Posts: 1656; Member since: Jun 06, 2010

If you don't understand economics, don't comment. It is better to remain silent at the risk of being thought a fool, than to talk and remove all doubt of it.

3. reckless562

Posts: 1153; Member since: Sep 09, 2013

Time to call my broker....

6. Bertelgeus

Posts: 126; Member since: Oct 15, 2014

Desperado

7. tacarat

Posts: 854; Member since: Apr 22, 2013

The S6 will do better if only because it'll be two years since the S4 came out. Hardcores buy every new model, most folks go for 2 years or more. I wouldn't be surprised if that's partly why Apple overhauls the phones bi-annually.

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