Samsung Electronics is currently conducting its third purchase for a share buyback worth 10 trillion won. Amid concerns over poor performance that have trapped Samsung Electronics' stock price in a range, the company's buyback for the purpose of canceling shares has acted as a positive factor for the stock price. During the buyback, Samsung Electronics has played a role in supporting the lower end of the stock price from a supply-demand perspective.
So, for investors aiming for short-term revenue, when should they buy and when should they sell?
By looking at the stock price trends when Samsung Electronics previously conducted share buybacks, some hints can be obtained. Historical cases show that the point at which the daily buyback volume of Samsung Electronics decreases acted as an inflection point for the stock price. When Samsung Electronics increases the number of shares it buys in a day, the stock price rises, while when the daily buyback volume decreases, the stock price shows weakness.
The same trend could be observed during this third buyback. If investors check the volume of share buyback applications before the market opens, they may expect short-term revenue.
As of 11 a.m. on the 14th, Samsung Electronics' common shares are trading around 62,100 won. Samsung Electronics' performance in the second quarter of this year (April to June) fell short of market expectations, leading the stock price to drop to 60,400 won on the 9th but rebound to hover around 62,000 won.
Samsung Electronics plans to buy 1 million common shares and 135,000 preferred shares (Samsung Electronics preferred) on this day. Following the announcement of the third share buyback plan on the 8th, Samsung Electronics has been purchasing common and preferred shares since the following day.
Samsung Electronics plans to acquire shares worth 3.501 trillion won (56,888,092 shares) by October 8. From the 9th until the 11th, they bought 1 million shares daily, exceeding 5% of the target. If they purchase another 1 million shares today, the achievement rate will increase to 7.03%.
In the previous first and second share buybacks, Samsung Electronics maintained the buyback volume up to 20% of the target. If the third share buyback follows the same trend, a daily buyback volume of 1 million shares is expected to continue until the 25th of this month.
Samsung Electronics also expanded the daily buyback volume after surpassing a 20% achievement rate during the first and second buybacks. After exceeding a 75% achievement rate, it reduced the daily buyback volume. Assuming they follow past buyback methods in this third buyback, the daily share buyback volume of Samsung Electronics is expected to increase from the end of this month to mid-September, and then gradually decrease afterwards.
The daily share buyback volume of Samsung Electronics has significantly affected its stock price. After achieving 75% of the target in the first and second buybacks, the stock price of Samsung Electronics fell by 2.17% on January 10 and 2.13% on April 11, respectively.
There was also a difference in the stock price increase rates between the periods of increasing the buyback volume (20-75% of the target) and decreasing it (75-100% of the target). During the first share buyback, the daily average stock price increase rate was 0.32% during the expansion phase and 0.04% during the reduction phase. The second share buyback saw similar differences, with 0.24% during the expansion phase and 0.06% during the reduction phase. This suggests that if Samsung Electronics enters a reduction phase in this third buyback, it may exhibit weakness.
In addition to the share buyback, factors that may influence the stock price of Samsung Electronics include the imposition of semiconductor tariffs by the U.S. and the development schedule for the sixth-generation High Bandwidth Memory (HBM) by Nvidia. The Donald Trump administration is expected to make a decision on the tariff rates for imported semiconductor goods as early as this month, based on Section 232 of the Trade Expansion Act. There are also expectations in the market that Samsung Electronics will deliver HBM4 samples to clients starting next month.