Samsung Electronics and SK Hynix are turning to shareholder-return measures after their shares fell sharply from record highs, despite benefiting from the global artificial-intelligence semiconductor boom and reporting record earnings.
Samsung said on July 30 that it is considering additional shareholder-return measures, including a possible special dividend, share buybacks and stock cancellations, as the company seeks to restore investor confidence.
During its second-quarter earnings conference call, Samsung said its board and management are actively reviewing specific plans for shareholder returns this year and are also discussing its next capital-return policy.
The company currently operates a three-year shareholder-return program covering 2024 through 2026, under which it pays regular annual dividends totaling about $7.1 billion. Investors are now watching whether Samsung will add special dividends or repurchase shares to provide further support for its stock.
Samsung shares closed at about $143 on July 30, down 44.7% from their previous record high of about $258. SK Hynix shares also dropped 55.7% from their peak of about $2,050 to about $907.
The declines came despite record profits at both companies, as investors had already priced in much of the expected growth from the AI semiconductor boom. Profit-taking and concerns over valuations have weighed on shares, prompting companies to focus more heavily on shareholder returns.
SK Hynix is also preparing additional shareholder-return measures, but the company has been limited by regulatory considerations following its U.S. American depositary receipt, or ADR, offering.
Financial industry officials said companies completing a U.S. public offering generally face a prospectus-delivery period after listing. Under U.S. Securities and Exchange Commission Rule 174, the period for an initial public offering is typically 25 days after the offering date.
While the rule does not directly prohibit companies from making new announcements, companies often avoid releasing major undisclosed information during the period to reduce potential legal risks related to securities disclosures.
SK Hynix’s ADRs began trading in the U.S. on July 10, meaning the 25-day period is expected to end around Aug. 4. The company is widely expected to announce more specific shareholder-return plans after that period expires.
SK Hynix Chief Financial Officer Kim Woo-hyun said on July 30 that the company is reviewing various options for additional shareholder returns but declined to provide details on the size, timing or structure of any measures.
He said regulatory and procedural restrictions related to the ADR offering had limited the company’s ability to discuss new material information and added that SK Hynix would share specific plans with investors once they are finalized.
Separately, SK Group Chairman Chey Tae-won purchased 3,620 SK Hynix shares on the open market, spending about $3.4 million based on the previous day’s closing price.
The purchase marked the first time Mr. Chey has personally held SK Hynix shares. The transaction remained below South Korea’s threshold requiring advance disclosure for insider purchases exceeding about $3.6 million, allowing him to complete the purchase without prior announcement.
SK Group described the move as an act of responsible management. Investors viewed the purchase as a signal of confidence from management after SK Hynix’s steep stock decline.
