By Jonathan Cheng And Min-Jeong Lee
SEOUL-- Samsung Electronics Co. said it is considering a stock
split, the latest signal that the company is willing to bend to
demands from shareholders and regulators as its shares trade at
more than $1,200 a share.
The stock-split remark was made by a Samsung investor relations
executive during an event in Seoul held by exchange operator Korea
Exchange and was later confirmed by a company spokesman, who
cautioned that no decision has been made.
The South Korean technology giant has been under pressure from
regulators and the domestic exchange operator to split its stock.
Samsung, which boasts a market capitalization of about $185
billion, accounts for 16.7% of the weighting on the country's
benchmark Kospi composite index. That is more than five times the
weighting for the country's second-largest company by market
capitalization, Hyundai Motor Co.
After months of pressure from investors for more shareholder
returns, Samsung said in November that it would repurchase about $2
billion worth of its own shares, its first buyback in seven
years.
In December, Samsung said that it was considering an increase
for its 2014 dividend payment of 30% to 50%. The dividend decision
needs approval from Samsung's board and its shareholders.
But Samsung has until now been silent on stock splits.
Even after trading in a relatively narrow band for the past
three years--including a lackluster 2014, as weakening earnings
weighed on the company's stock--a single share in Samsung
Electronics Co. costs 1,350,000 Korean won ($1,250).
By comparison, Apple Inc., the world's most valuable company by
market value, peaked at a share price of $702.10 in September 2012.
Since completing a seven-for-one stock split in June, Apple shares
have traded as high as $119, which would have been worth $833 at
its pre-split levels.
In an October interview with The Wall Street Journal, Korea
Exchange Chairman and Chief Executive Choi Kyoung-soo said that he
was pushing companies with high stock prices to effect splits to
bring in smaller investors and spur trading volume.
"For those companies whose shares are big, we encourage them to
do a stock split and to offer more dividends," Mr. Choi said. "When
stock prices are extremely high, individual investors find it
difficult to invest in those stocks."
One analyst, Song Myung-sup of HI Investment & Securities,
said a Samsung stock split would make the shares "more approachable
for local retail investors."
Samsung isn't the only company in the cross hairs. Shares of
Amorepacific Corp., South Korea's biggest cosmetic manufacturer,
more than doubled last year, lifting the stock price to an
astronomical 2,475,000 won ($2,300) a share.
Mr. Choi suggested that Amorepacific could split its stock to
about 100,000 won or 50,000 won, suggesting a stock split of
between 25-to-1 to 50-to-1.
"A stock split is definitely something to consider, but for now
we have no plans," said Hee-chul Shin, senior vice president of
Amorepacific's business law division.
Mr. Choi said companies were reluctant to do stock splits.
"They tend to take pride in their high stock prices--it makes
them think they are king of kings," Mr. Choi said.
Samsung shares edged up 0.6% to 1,351,000 won in midday trading
in Seoul on Tuesday. Amorepacific shares surged 3.3% in midday
trading Tuesday to 2,443,000 won.
Write to Jonathan Cheng at jonathan.cheng@wsj.com and Min-Jeong
Lee at min-jeong.lee@wsj.com
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