Samsung Electronics mulls stock split to pacify investors
Samsung Electronics mulls stock split to pacify investorsReuters

Shares in South Korea's Samsung Electronics finished higher on 20 January on news that the company was mulling a stock split.

Shares in the world's top smartphone maker finished 2.16% higher in Seoul trade after the firm's head of investor relations, Robert Yi, said the tech giant had been considering a stock split for some time but that it was too early to make a decision.

Samsung, part of South Korea's largest family-owned conglomerate, is considering a stock split as waning profits have put pressure on the cash-rich firm to appease investors.

A split will make it easier to buy Samsung stock and could attract more retail investors, Reuters reported.

Yi said on 20 January: "We acknowledge the sentimental effect of a stock split, but how big an effect such an action can have on the company's long-term value needs to be considered from a variety of angles."

Analysts said Samsung may be wary of driving its stock price too high as the group prepares for a change in leadership.

Chung Sun-sup, head of research firm Chaebul.com, told the news agency: "A higher share price will increase the inheritance tax burden related to Chairman Lee Kun-hee's Samsung Electronics shares.

"There's no incentive for Samsung Electronics to split the shares now."

In November 2014, Samsung announced a $2bn (€1.7bn, £1.3bn) share buyback plan, its first since 2007, in the wake of investor calls for higher returns against a backdrop of falling profits.