This is the first in a three-part series examining key plans unveiled by Samsung Electronics during its recent Analyst Day event. — ED.
By Kim Yoo-chul
When will Samsung Electronics get listed in the United States?
This question was addressed at its recent Analyst Day but no timeframe or level of commitment was provided. Analysts say the issue is crucial.
"Samsung has a cash pile of 50 trillion won so the company doesn't need it for extra money," said Seo Won-suk, a senior analyst at Korea Investment.
"Plus, Samsung would be put under greater regulatory scrutiny," said the analyst.
But it is the key to propping up its stock price, other analysts said, adding that a U.S. listing is the shortest and most reasonable move to do this.
Mark Newman, a senior analyst at Bernstein Research based in Hong Kong, says that Samsung stock is heavily limited by the market it trades in and added that top brokerages believe that issuing American Depository Receipts (ADR) or a U.S. listing is necessary to increase foreign interest.
"Samsung currently represents 18 percent of the KOSPI index and needs to appeal more to global investors through an ADR. We show that the stock return is highly correlated to buying by foreigners," Newman was quoted as saying.
He continued; "Not having an ADR or foreign market listing in a larger market significantly limits Samsung's volume, which we believe holds back the stock."
Stellar quarterly performances weren't enough to boost Samsung's stock as investors were concerned that its current dominance in the nearly saturated global smartphone market will limit the chances of an increase in value.
During the third quarter of this year, the company reported 59.08 trillion won in quarterly revenue; while operating profit was 10.16 trillion won ― both historical highs.
A senior fund manager at a U.S.-based investment bank in Seoul told The Korea Times that Samsung Electronics' stocks would soar 50 percent in just a few days after a U.S. listing thanks to the company's diversified business portfolio, future potential and clear business leverage.
But Samsung is worried about increased daily volatility of its stocks, if it lists in the United States, which it is determined to avoid, according to company officials.
"Samsung is a global company and we've acknowledged investors' wish and needs for the U.S. listing. But we should maintain our decades-long conservative cash-management style. Samsung is changing. But any dramatic decisions are unlikely," said an Samsung official by telephone.
"The U.S. listing of Samsung may cause troubles for power transitions. And I think the listing maybe possible after the succession is completed," said another Samsung official asking not to be identified.
By Kim Yoo-chul
When will Samsung Electronics get listed in the United States?
This question was addressed at its recent Analyst Day but no timeframe or level of commitment was provided. Analysts say the issue is crucial.
"Samsung has a cash pile of 50 trillion won so the company doesn't need it for extra money," said Seo Won-suk, a senior analyst at Korea Investment.
"Plus, Samsung would be put under greater regulatory scrutiny," said the analyst.
But it is the key to propping up its stock price, other analysts said, adding that a U.S. listing is the shortest and most reasonable move to do this.
Mark Newman, a senior analyst at Bernstein Research based in Hong Kong, says that Samsung stock is heavily limited by the market it trades in and added that top brokerages believe that issuing American Depository Receipts (ADR) or a U.S. listing is necessary to increase foreign interest.
"Samsung currently represents 18 percent of the KOSPI index and needs to appeal more to global investors through an ADR. We show that the stock return is highly correlated to buying by foreigners," Newman was quoted as saying.
He continued; "Not having an ADR or foreign market listing in a larger market significantly limits Samsung's volume, which we believe holds back the stock."
Stellar quarterly performances weren't enough to boost Samsung's stock as investors were concerned that its current dominance in the nearly saturated global smartphone market will limit the chances of an increase in value.
During the third quarter of this year, the company reported 59.08 trillion won in quarterly revenue; while operating profit was 10.16 trillion won ― both historical highs.
A senior fund manager at a U.S.-based investment bank in Seoul told The Korea Times that Samsung Electronics' stocks would soar 50 percent in just a few days after a U.S. listing thanks to the company's diversified business portfolio, future potential and clear business leverage.
But Samsung is worried about increased daily volatility of its stocks, if it lists in the United States, which it is determined to avoid, according to company officials.
"Samsung is a global company and we've acknowledged investors' wish and needs for the U.S. listing. But we should maintain our decades-long conservative cash-management style. Samsung is changing. But any dramatic decisions are unlikely," said an Samsung official by telephone.
"The U.S. listing of Samsung may cause troubles for power transitions. And I think the listing maybe possible after the succession is completed," said another Samsung official asking not to be identified.
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