[Edaily Reporter kyoungeun kim ] On the 15th, SamsungElectronics’ common and preferred shares are showing mixed trends on the KOSPI market.
According to MP Doctor, as of 2:00 p.m. today, SamsungElectronics(005930)is trading at 247,500 won, down 1,500 won (-0.60%) from the previous day, while the preferred stock, SamsungElectronics(1P)(005935), is trading at 188,400 won, up 5,000 won (2.73%), showing a contrasting trend.

Expectations regarding the purchase and cancellation of preferred shares appear to be driving buying interest in SamsungElectronics(1P) Preferred Stock.
Under the Act on the Structural Improvement of the Financial Industry, if SamsungElectronics cancels its common stock, the ownership stakes of Samsung Life Insurance and SamsungFire&MarineInsurance could exceed 10 percent, requiring the sale of the excess shares. However, non-voting preferred shares are relatively free from such regulations and are therefore being discussed as an alternative to the buyback and cancellation of common stock.
Analysts also note that preferred stock offers advantages from a pricing perspective. Based on recent closing prices, SamsungElectronics(1P) has been trading at a 25.5% discount to common stock; observers predict that if the use of preferred stock expands during the buyback and cancellation process, the discount that has historically applied to preferred stock will narrow.
Kim Soo-hyun, head of the Research Center at DS Investment & Securities, estimated that the scale of SamsungElectronics’ share buyback and cancellation, to be executed early next year, would range from 10 trillion to 20 trillion won. He stated, “Considering the issues related to the Industrial Finance Act that arise when common shares are canceled, we cannot rule out the possibility that the proportion of preferred shares in the funds for share cancellation will increase.”
He also predicted that, to avoid the burden of selling stakes in financial affiliates, the company would allocate a portion of its shareholder return funds to share buybacks and cancellations rather than directing the entire amount toward dividends.
SamsungElectronics has a history of increasing the proportion of preferred shares purchased when the price gap between common and preferred shares widened. Since the company’s founding, preferred shares have accounted for approximately 16.9% of the total shares retired, and in its first share buyback program in 2015, 30% of the total purchase amount was allocated to preferred shares.
Amid these developments, Life Asset Management sent a Seohan to SamsungElectronics’ board of directors and management on the same day, urging them to prioritize using the remaining shareholder return funds for the repurchase and cancellation of preferred shares rather than cash dividends. The proposal calls for immediately canceling the preferred shares upon repurchase—but only when they are trading at a lower price than common shares—and allocating the remaining funds entirely to cash dividends.
Kang Dae-kwon, Co-CEO of Life Asset Management, stated, “The cancellation of preferred shares allows us to break free from the corporate governance constraints that have long hindered the cancellation of common shares, while simultaneously using the same funds to increase shareholder value more significantly and permanently.”