Shares of Samsung Electronics rose 7.2% on Friday, recording their biggest daily gain since March 2020, after the company unveiled a major stock buyback plan aimed at boosting shareholder value.
The announcement follows concerns about the company’s semiconductor business, which has faced declining profits in recent quarters.
In a regulatory filing issued after markets closed, Samsung said it would buy back shares worth 10 trillion won ($7.17 billion) over the next year.
The first phase, worth 3 trillion won, will take place in the next three months, covering 50.14 million common shares and 6.91 million preferred shares. Samsung plans to cancel these shares to enhance value for existing shareholders.
The company’s board of directors is set to decide how to deploy the remaining 7 trillion won from the buyback program, the first of its kind since 2017 when Samsung completed a buyback worth 20.7 trillion won.
Samsung’s move comes amid a difficult period for its semiconductor division, which saw profits decline 40% on a quarterly basis. However, the company stressed its focus on producing high-quality chips and progress in securing a major supply deal, indicating confidence in its long-term strategy.
Samsung’s share price rise on Friday saw a rebound from its lowest levels since June 2020. Despite the big daily jump, the stock is still down 32% year-to-date, reflecting broader investor wariness about the technology sector.
The buyback announcement is widely viewed as an attempt to restore investor confidence and reaffirm the company’s commitment to shareholder returns.
