Samsung Electronics delays shareholder return plan, shares plunge as much as 6.6%

October 29 - Samsung Electronics shares erased earlier gains and plunged as much as 6.6% as investors were disappointed by the lack of a new shareholder return plan in its earnings report. Samsung Electronics said it will announce the plan by the end of January. This stands in sharp contrast to SK Hynix, which not only reported strong earnings on Wednesday but also said it plans to return about $45 billion in additional funds to shareholders. In addition, Samsung's chip business profit fell short of expectations and increased capital expenditure also weighed on market sentiment toward the company.

eToro analyst Josh Gilbert said that making the market wait until January to see the full return plan leaves a gap where good news should have been. Samsung has also raised capital expenditure by about 60% this year, so before it clearly explains how this windfall will be allocated between new capacity and shareholders, how much money will actually return to investors is a real question mark.

Rob Li, managing partner at Amont Partners, said delaying the details of shareholder returns to January is disappointing, which gives stock traders an excuse to rotate funds into SK Hynix or Micron in the coming months, as the other two companies have clearer paths for shareholder returns.