Activist hedge fund Elliott Management has released a letter to Samsung’s board of directors, claiming that the South Korean tech giant needs to simplify their corporate structure, increase return of capital to shareholders, and most importantly to be listed on NASDAQ. According to the hedge fund, such changes could increase the company’s value on the stock market.
Samsung is generating about 50% of all its revenue from smartphones and tablets, as the Galaxy line has proved to be of high quality and innovative. Recently Samsung’s galaxy line reputation is on the line, as the Galaxy Note 7 has been reported to explode after overheating. The new product is a failure, but investors expect the next Galaxy to impress customers.
Elliott is also proposing that Samsung should separate Samsung Electronics from Samsung’s wider corporate holdings, “We see this as a defining moment and a tremendous opportunity for the forthcoming new leadership of Samsung Electronics to further advance the company’s remarkable legacy. Now is the time for real shareholder value, corporate governance and transparency improvements, which we believe will help Samsung Electronics achieve an equity market valuation that properly reflects its first-class portfolio of businesses. We sincerely hope that Samsung will seize this opportunity.”