Tuesday, 3 January 2017

Samsung may split in two following the Note 7 recall

Samsung has been facing a lot of flak in recent times over different issues, most recently the Note 7 fiasco. Recalls are never good news and Samsung had to implement them followed by a proportionate bad reaction from the investors. Users either had to send back the phones or take advantage of repair services. In Canada for instance, Samsung Phone Repair Toronto is a tool that can prove valuable.

Executive decisions seem to being made regarding the future of the Korean company. Activist hedge fund Elliott Management owns a small part of Samsung and suggested that the electronics division be split off and put on NASDAQ. This would follow the example of tech giants such Apple, Microsoft and Alphabet. This decision would ensure the prime electronics division would be easier to control for the shareholders along with an assurance of transparency. Any changes in management that could prevent situations like the recalls would also be easier implemented.
The ‘chaebol' structure of the South Korean Samsung is a norm in the country. ‘Chae’ meaning wealth and ‘bol' meaning clan provides a basic assumption of how top companies like Samsung, LG, Hyundai among others are run. Well-spaced family business conglomerates are an apt way to describe them. The families themselves own shares in the different holding organisations which in their right, maintain ownership of other network firms. This provides a wall against outside investors and keeps the conglomerates whole. It also furthers discretion and allows for a strong top down management norm.
The recent board meeting changed this when the company released a statement that entertained restructuring, as suggested and increasing dividends. The chairman Lee Kun-hee’s son was appointed to the board of directors which follows in the present climate of change. It doesn't seem like the move will take place immediately although.
The Memo stated that the division had taken steps to simplify the business and concentrate on the basic capabilities while also trying to maximise future business opportunities. The company also retained external advisors to assist with a review process due to the complex nature of the proposed venture. Any action would be taken only after the review and after six months at the very least.

In the meantime, any problems with your Samsung smartphones can be handled quickly and easily. If you're based in Ontario and have screen problems, Samsung Screen Repair Mississauga has got you covered.

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