Samsung shares soar to an all-time high; company is now valued at $224 billion USD
Back in August, a little more than two weeks after the introduction of the Samsung Galaxy Note 7, the company's stock price soared to an all-time high at the equivalent of $1480 USD a share. But once it became apparent that the phablet had some serious issues, sellers took over and knocked more than $14 billion off the company's stock market valuation.
Despite the loss of as much as $5 billion in potential Galaxy Note 7 sales, the shares have rebounded including a gain of $9 billion in Samsung's valuation this morning. That puts Sammy's shares at a new all-time high once again. Part of the reason is the announcement that the company will return 50% of its free cash flow in 2016 and 2017 through the use of increased dividends and share buybacks. 2016 dividends are going to increase 36%. Samsung is taking these steps after U.S. hedge fund Elliott Management put pressure on the company to take steps to increase stockholder value. The fund owns .6% of Samsung and had hoped to get the manufacturer to pay out 75% of free cash flow.
There is also an attempt by institutional stockholders to change Samsung's structure into a holding company with an operating unit. This could potentially consolidate the power of the founding Lee family, especially if they exchange some of their current shares into holding company stock.
Samsung's shares closed Wednesday at the equivalent of $1,496.74 USD, up 4.2% on the day. The company now has a valuation of $224 billion.