Samsung Stock Split

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Samsung Electronics is a heavyweight on the South Korean bourse with the most expensive shares of any company in Korea. While announcing the company’s 2017 earnings, Samsung made even bigger headlines by announcing a 50:1 stock split. It’s created a lot of buzz and speculation.

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Samsung Electronics bombarded the market with news before and after the stock market's opening on Wednesday. While announcing its highest earnings yet, the electronics giant also said it decided to split its stock. It was a day of convulsive trading for the stock market, as Samsung stocks surged more than 8 percent at one point and setting new price records. After Samsung's 50:1 stock split, the price of its shares will fall from 2.5 million won to about 50,000 won, while the number of its shares will multiply by a factor of 50. This means that they will be more accessible to investors.

[Soundbite] Park Jong-moon(Samsung Electronics) : "We hope that the stock split will contribute to enhancing our company's corporate value in the long term by expanding the number of shareholders and adding liquidity to our stocks."

After numerous speculations about the background and timing of Samsung's decision, the market's reaction has been positive so far. Samsung has been lauded for its willingness to do everything it can for its shareholders, such as stock buybacks, cancellation of shares and expanded dividends, on the back of record-high earnings.

[Soundbite] Kim Dong-won(KB Securities Research Center) : "The stock split has enabled Samsung to solve the long-time issue of stock liquidity demanded not only by institutional but individual investors as well. In doing so, Samsung Electronics has sent a signal that now it can do anything for its shareholders."

With more shareholders, Samsung will also be able to reflect more diverse opinions in its management. Samsung has also dismissed speculation that its stock split has anything to do with next week's appellate court verdict for its chairman, Lee Jae-yong or issues related to his inheriting the Samsung business.