Parmy Olson
The fiasco caused by the Galaxy Note 7, Samsung has become something similar to a movie of natural disasters, while the worse it gets, the more difficult it is to look away from the scene.
The main operators of the united States reported over the weekend that it suspended the sale of the phone. According to some reports, the equipment replaced and "safe" have also been burned to the ground. Now the own Samsung has been stopping the production of the phone, according to data from The Wall Street Journal.
it Seems that Samsung is in the midst of an acute crisis which threatens not only the brand Galaxy, but the Samsung brand, as he wrote the contributor of Forbes Ewan Spence.
however, it may be thought that in the midst of this chaos of public relations the share price of Samsung to be able to go on the upside.
Read also: Samsung suspends the production of its Note 7
well, the shares of Samsung have risen approximately 15% in the tumultuous last month. The news of the weekend about the suspension of the production of the Note 7 Samsung only made the titles lost 1.5% on the stock exchange of Seoul this Monday, a impact is relatively smaller.
shares of Samsung have been supported well because of something totally out of the scope of hardware flammable: a hedge fund of the united States has been pressing for a reorganization radical of the structure of the company, something that has the potential to unlock more value for shareholders in the future.
Elliott Management, run by billionaire Paul Singer, has said for some time that the shares of Samsung are undervalued due to the complex corporate structure of the firm.
last Wednesday, the fund sent an open letter to Samsung, asking for escindiera and list in the stock market in its operating company –a part that would include most of Samsung Electronics– in the Nasdaq of New York.
share price of Samsung in the last month. Via Google Finance.
This company operator should return the 75% of its free cash flow to shareholders, together with a special dividend of 27,000 million us dollars (30 trillion won in south korea).
it Is a proposal very ambitious, but not impossible in the technology industry, where heavy weights such as Apple and Microsoft have some of the balances of cash more a large of the Earth.
The criticism of Elliott on the huge cash reserves Samsung (69,000 million dollars) is similar to, for example, the activism undertaken by billionaire Carl Icahn in search of a repurchase of shares, public and private 150,000 million by Apple in 2013. In the end, Apple did not touch its massive reserves of cash, and Icahn sold their Apple stock in April of 2016.
Elliott, who owns 0.6% of Samsung Electronics, has already sought before the change within the company, and their struggle is, in large measure, a transparency within a conglomerate (or chaebol south Korean) giant that is tightly controlled by the Lee family.
Read also: Explosions in the Note 7 speed relay steering in Samsung
The activism corporate american in Asia is rare, especially in South Korea, where the chaebols family controlled a large part of the industrial landscape.
last year, Elliott Management tried to stop the corporate family Lee, Cheil Industries, buying a building of the subsidiary of Samsung C&T Corp. for 9,300 mdd.
Elliott lost that battle and the deal was closed, giving the heir-apparent to J. Y. Lee for greater control of the Samsung Group and a greater exposure to Samsung Electronics.
however, the vote of the shareholders at the time turned out to be a narrow victory of 3% for Samsung, and this gives the Elliott and to the shareholders of Samsung greater hope that some kind of reorganization radical could be still possible.
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