A tale of two Samsungs: Shareholders call for the company to split in two

...

Samsung may be preparing to split in two — reports surfaced early this morning that the company would announce some big changes to its business that could boost the profit returned to shareholders. The split would involve the creation of one holding company and one operating company.

Samsung has had its fair share of problems over the past few months, the biggest of which has been the massive and failed recall of the Galaxy Note 7. On top of that, the company recalled a whopping 2.8 million washing machines, and Samsung’s offices in Seoul has been raided twice because of a political scandal in South Korea. All this has led investors to grow a little concerned about how Samsung is managed.

More: Following Galaxy Note 7 debacle, Samsung’s battery-making arm isn’t doing very well

The result of all these issues? In the company’s earnings report for Q3 2016, it listed $4.5 billion in operating profit — which is down a hefty 30 percent year-over-year and represents its worst quarter in two years.

The news that the company would split actually comes after a New York-based hedge fund called Elliot Associates publicly proposed that Samsung split into two, essentially giving shareholders a dividend that would amount to $27 billion. Elliot, which owns a 0.6 percent stake in Samsung, also proposed that the company add three independent board members, as well as list shares on the U.S. stock market.

The move would be an interesting one — Elliot Associates and the Samsung-founding Lee family have a somewhat strained relationship after a proxy battle in 2015, in which Elliot Associates accused Samsung of proposing a merger of Samsung and Chiel Industries — which the Lee family also owns — in order to consolidate its power over Samsung Electronics.

Samsung has yet to publicly confirm a split, however, it is set to hold a conference call at 9:30 a.m. local time on Tuesday, or 4:30 p.m. PT on November 28 to discuss management changes in detail.

Categories
APPLICATIONS
0 Comment

Leave a Reply

Captcha image


RELATED BY

  • 5300c769af79e

    Live Chat: Google's Pixel Event!

    The “Made by Google” event is finally here and we are in San Francisco to cover it!Leaks all point to the unveiling of two phones, the Pixel and Pixel XL, Google Home, Google WiFi, Chromecast Ultra, and Google’s Daydream VR headset.
  • 5300c769af79e

    Comcast Teases Wireless Phone Service

    The country's largest cable operator will reportedly provide a hybrid cellular-and-Wi-Fi service, using a combination of Verizon's network and millions of its own wireless hotspots, Bloomberg reports.buy some sort of multi-package bundle from us," Comcast CEO Brian Roberts said during this week's Goldman Sachs Communacopia conference in New York, according to a transcript.
  • 5300c769af79e

    Order $400 'Soft Gold' OnePlus 3 Now

    The wait is over: US consumers can now order the OnePlus 3 "Soft Gold" smartphone for $399.But this isn't your typical gaudy gold smartphone, OnePlus assures buyers.
  • 5300c769af79e

    #TBT: Happy Holidays From the Android Team

    A few years ago in 2012, the Android team sent out its holiday greetings in the form of a stop animation video featuring a few Android mini collectibles.It’s cute and completely creepy all at the same time.