Shares in Samsung Electronics plunged more than 8% in early trading on Monday after the company’s record plan to distribute dividends to shareholders, worth nearly $80 billion, disappointed investors who had expected a larger share of the cash dividends generated by the artificial intelligence boom.
Samsung and its rival SK Hynix announced last week major plans to distribute dividends to shareholders, following increasing pressure from investors to return some of the gains the companies made from their record profits, amid a booming artificial intelligence industry that is driving demand for electronic chips.
Samsung said on Friday that total shareholder returns for this year will range between 90 trillion won and 110 trillion won, equivalent to about $65 billion to $80 billion, including 30 trillion won to be distributed as cash dividends during the third quarter.
Although these returns are five times the previous record set in 2020, analysts said the figures fell short of their expectations and that they were waiting for more details on the share buyback plans.
Shares of SK Hynix fell 2.5%, while South Korea's Kospi index declined 3.1%.
Son In-joon, an analyst at Eugene Securities, said that Samsung, unlike SK Hynix, did not indicate the possibility of raising its current policy regarding shareholder returns, nor did it announce a plan to eliminate treasury shares, which could contribute more directly to supporting the share price, which he considered disappointing.
