Samsung ponders stock split as profits tumble

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Samsung may split its stock to soothe existing investors and to attract new ones.

Speaking at a press event in Seoul, Robert Yi, head of investor relations at the South Korean electronics company, suggested the company was mulling the move but declined to offer details of the split.

The move comes on the heels of steadily declining profits at the smartphone maker. On 8 January, Samsung released its earnings guidance for Q4 2014, signalling that they expected profits to drop 37% year-on-year. Samsung expected sales to be down 12.3% year-on-year.

The news triggered a rise in Samsung’s share price, which closed 2.16% higher yesterday.

Stock splits increase the number of shares in a publicly listed company, adjusting the price downwards so that capitalisation remains constant and dilution does not occur. This makes shares easier to buy, potentially increasing demand for the stock.

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