|Bid||75.40 x 900|
|Ask||76.22 x 1100|
|Day's Range||75.55 - 76.43|
|52 Week Range||50.94 - 84.15|
|Beta (5Y Monthly)||1.10|
|PE Ratio (TTM)||16.02|
|Forward Dividend & Yield||0.46 (0.60%)|
|Ex-Dividend Date||Mar 27, 2020|
|1y Target Est||100.48|
Walmart CEO Doug McMillon discusses the need for stimulus at the Yahoo Finance All Markets Summit.
(Bloomberg Opinion) -- Lee Kun-hee turned Samsung into a household name and a global brand. But he never really managed to transform Samsung Electronics Co. into a truly international company. Samsung, the name, can be found across all corners of the globe. And inside almost every device on the planet — stamped on memory and storage chips, as well as display screens. That’s thanks to Lee, who died at 78 over the weekend after many years of hospitalization and a diminishing role in his empire’s operation.A bonfire he lit in the 1990s, literally from electronics products that didn’t meet his standards, is emblematic of Lee’s determination to build a global top-tier brand known for quality. Today it’s the world’s most ubiquitous electronics label, besting Japanese archrival Sony Corp.Samsung’s transformation coincided with, or perhaps even helped shape, South Korea’s own move away from autocratic and military leadership into a more democratic, open nation run by a civilian leader. Seoul had just hosted the Olympics and the world was on the cusp of the computer and internet revolutions. In the 1990s, the company went even deeper into memory chips, a business that industry pioneer Intel Corp. moved away from a decade earlier. That decision underpins Samsung's technological strength to this day.Yet from a management perspective, Lee and his son Jay Y. Lee were busy building an inward-looking empire. Its board and executive ranks are stacked almost exclusively with Koreans while outsiders rarely get a word in. When Paul Elliot Singer’s Elliott Management Corp. took a stake in affiliate Samsung C&T Corp., local prosecutors responded with an investigation into a possible breach of disclosure rules. It eventually dropped the case without indictment, but the point had been made.This kind of insularism, like the chaebol system itself, isn’t healthy and stands as the biggest risk to Samsung’s longevity. American technology companies have been able to survive, and ride out crises, with globally diverse management teams and a willingness to engage outside views. If Lee’s successors want to solidify the South Korean giant’s future, their massive inheritance tax bill may be the catalyst. The nation’s 50% levy means his estate, likely to include the younger Lee and current de-facto leader, will be on the hook for around $10 billion of his father’s $20.7 billion fortune. Samsung itself has three times that figure in cash on hand. But that’s shareholder money, and the tax bill ought to be paid out of the estate. The Lee family will need to raise the funds itself, and a sale of Samsung Electronics stock is the most likely solution.In this way, a forced sale may end up being a blessing for Samsung’s shareholders and a chance to build a new future.Of course, there are alternatives, which include borrowing against those shares or selling family assets, including stakes in other companies. There’s also the expectation that Samsung may boost its dividend (it can afford to), which would offer a cash injection to the Lee family. The patriarch only owned around 4.2% of Samsung and maintained control through a complicated network of subsidiaries, par for the course among the nation’s chaebol. While a 2% share sale in open markets is feasible, it would take time and possibly depress the share price.Instead, the Lee family should shop around for a buyer directly — one that can help turn the company more global.Right now, Samsung is 54% foreign-owned. Yet the lion’s share of that stake is in its Seoul-traded common stock. Its London-traded depositary receipts are worth only $24 billion, or just 7.5% of its market capitalization. By comparison, Taiwan Semiconductor Manufacturing Co.’s New York-traded receipts are valued at $94 billion, equal to 23% of market value, according to Bloomberg Data. Samsung’s business is also overweight South Korea, at 15% of revenue, while the nation’s economy is just outside the top 10 globally and accounts for less than 2% of world GDP. An easy solution would be to hold a New York listing. The Lee family could offload the required stake, and Samsung could raise more funds. But a preferred approach would be to invite a strategic investor to join its shareholder ranks, and even its board. It would be a beautiful irony if Elliott were to be that candidate given their history. Intel or Nvidia Corp. might be a better choice.Intel is struggling right now, as my colleague Tae Kim noted, yet it has lots of cash and could surely raise more. It also has an uncanny ability to reform itself when under pressure — witness the move into server chips when desktop PC sales slowed. The two could even team up to take on their nemesis: TSMC. Nvidia would be an even better partner. The fabless chip designer is a global hero right now thanks to its gallop into artificial intelligence. However, I admit the prospects for such an investment are dim given that it’s planning to buy Arm Ltd. in a deal that’s already facing regulatory scrutiny. Other candidates include Huawei Technologies Co. or, to be truly edgy, Mukesh Ambani’s Reliance Group.As the world remembers Lee Kun-hee’s legacy for creating a global brand, it’s time for his successors to start their own legacy of building a global company.This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Tim Culpan is a Bloomberg Opinion columnist covering technology. He previously covered technology for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinionSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.
(Bloomberg) -- Lee Kun-hee, who transformed Samsung Electronics Co. from a copycat South Korean appliance maker into the world’s biggest producer of smartphones, televisions and memory chips, has died. He was 78.Lee passed away on Sunday with his family by his side, the company said in a statement, without mentioning the cause of death. His family will hold a private funeral. He had been hospitalized since a heart attack in 2014 and was treated for lung cancer in the late 1990s.Lee, who told employees to “change everything except your wife and children” during his drive to foster innovation and challenge rivals such as Sony Corp., was South Korea’s richest person. He had an estimated net worth of $20.7 billion, according to the Bloomberg Billionaires Index. Samsung, the biggest of South Korea’s family-run industrial groups, known as chaebol, has been led by his only son since the heart attack.“Chairman Lee was a true visionary who transformed Samsung into the world-leading innovator and industrial powerhouse from a local business,” the company said. “His legacy will be everlasting.”His son Jay Y. Lee has been the conglomerate’s de facto leader since his father’s hospitalization in 2014, but it isn’t clear whether he will take over his father’s role as had long been anticipated. The younger Lee is currently grappling with two simultaneous legal disputes with South Korean prosecutors over allegations of bribery and corruption related to succession.Lee, who has denied any wrongdoing, was in fact supposed to attend a hearing for one of those court cases Monday, but instead is expected to remain at the hospital with his family. Samsung hasn’t said who will step into the elder Lee’s role as chairman.Samsung, the maker of the Galaxy line of smartphones, has been riding a Covid-era boom in online activity despite the legal clashes. The company also supplies semiconductors for Google’s data centers and Apple Inc.’s iPhone, and is the world’s most advanced maker of displays for TVs, computers and mobile devices.Samsung C&T Corp., the de facto holding company for the group, surged as much as 21%, while Samsung Life Insurance Co. rose as much as 16%. Some units at Samsung Group are expected to raise dividends, according to a note from Korea Investment & Securities. Samsung Electronics shares were little changed.Lee Kun-hee’s heirs now face an estate tax of roughly $10 billion, and paying it may complicate the family’s control of the Samsung conglomerate -- his beneficiaries would likely have to sell some assets to cover the tax — diluting their stake in Samsung. South Korea’s levy of 50% on estates of more than 3 billion won ($2.6 million) is the second-highest among countries in the Organization for Economic Cooperation and Development, after Japan.The Samsung empire includes 62 companies. Although the late Lee owned large chunks of some of the businesses — including 4.2% of Samsung Electronics — they’re not big enough to afford control of the conglomerate. The family depends on informal ties to executives who run related companies, and a lot of that soft power may dissipate with Lee’s death.It was Lee Kun-Hee who built the company into the electronics powerhouse of today, becoming synonymous with the rise of South Korea on a global economic stage.Named one of the world’s 100 most influential people by Time magazine in 2005, Lee began overhauling Samsung Electronics after he saw the company’s products gathering dust in a Los Angeles electronics store, according to “The Lee Kun Hee Story,” a 2010 biography by Lee Kyung-sik. The Suwon, South Korea-based company had become known for cheap, low-quality electronics gear and was in the “second phase of cancer,” sending out 6,000 people to fix products made by 30,000 employees, Lee said in 1993, according to the biography.Why Samsung’s Billionaire Scion Faces Two More Trials: QuickTakeThe company’s makeover started in 1993 when Lee gathered top executives in Germany and laid out a plan, known as the Frankfurt Declaration, to transform Samsung from a second-tier television maker into an industry leader. The company’s new mission: create high-quality products, even if it meant lower sales.Samsung Electronics became the world’s top maker of computer memory chips in 1992, the same year it became the first to develop 64-megabyte DRAM chips, according to the company.Lee was born on Jan. 9, 1942, in Daegu about 240 kilometers (150 miles) south of Seoul, and was raised in the nearby rural district of Uiryeong, according to the company.In 1938, his father Lee Byung-chull opened a four-story grocery store in Daegu that would later become Samsung Group.As a teenager, Lee Kun-Hee liked movies and cars and kept to himself. He took up wrestling and played rugby in high school to fight loneliness. He graduated with a degree in economics from Waseda University in Tokyo and also studied business administration in the U.S. at George Washington University in Washington.In 1971, Lee Byung-chull chose his youngest son to be his successor, and in 1974, the company moved into semiconductors when it acquired a 50% stake in unprofitable Hankook Semiconductor. The business turned profitable in 1988, helped by dynamic random-access memory chips it produced.After the Frankfurt Declaration, Lee required employees to arrive at work at 7 a.m. instead of their usual 8:30 a.m. start, so they could “soak up reform in their slumber,” according to the biography.In 1995, he assembled 2,000 workers to watch him make a bonfire out of 150,000 mobile phones, fax machines and other company products that didn’t meet his quality standards.Lee’s cultural change eventually produced results. Samsung Electronics surpassed Tokyo-based Sony to become the top seller of flat-screen TVs in 2006, the same year its market value exceeded $100 billion.In 2010, Samsung introduced the Galaxy-branded smartphone running Alphabet Inc.’s Android software, which helped it pass Apple as the world’s biggest smartphone maker in 2011 in terms of units sold. By introducing the Galaxy Note in 2011, Samsung created a new product niche known as the phablet, a smartphone-tablet hybrid.Political ControversySamsung became the biggest seller of all mobile phones in 2012, unseating Nokia Oyj, which had been the industry leader for more than a decade. Its success in smartphones then boosted profits at its component businesses, including memory chips, display and processors.Lee’s career was also notable for its setbacks and controversies. An expansion into the car business was unsuccessful. Samsung Motor Inc. rolled out its first automobiles in 1998 and failed to attract buyers. The unit was placed into receivership and Renault SA purchased a majority stake in 2000.Lee was mired in political scandals in the late 1990s after being convicted of paying bribes to former president Roh Tae-woo in 1996. He was pardoned by President Kim Young-sam a year later.In 2009, Lee was found guilty of tax evasion and breach of duty for causing losses at Samsung SDS Co., an information technology services provider, because he knew the company illegally sold bonds with warrants to his son at artificially low prices. He was fined 110 billion won and received a suspended three-year jail sentence.Presidential PardonFour months after the 2009 ruling, South Korea’s then-President Lee Myung-bak pardoned Lee, a member of the International Olympic Committee, so he could help the country’s successful bid to host the 2018 Winter Olympics in Pyeongchang.Lee, who resigned from the board of Samsung Electronics in 2008 amid the controversies, returned as chairman in March 2010, telling employees the business was “facing a real crisis.”“In 10 years, the majority of products that represent Samsung may no longer exist,” he said in a statement announcing his return. “We must have a new start. There is no time to hesitate.”Two months later, Samsung Group said it would invest 23 trillion won to expand in areas such as health care and solar batteries by 2020.Lee’s son, Jay Y. Lee, became vice chairman of Samsung Electronics in December 2012 and his daughter, Lee Boo-jin, is president of Hotel Shilla Co., a Samsung affiliate, raising concerns that the founding family would maintain its grip on the conglomerate at the expense of minority shareholders. That issue lies at the heart of the two legal disputes the younger Lee is now embroiled in.In August 2019, the Supreme Court ordered the retrial of Jay Y. Lee over bribery charges that voided an earlier decision to suspend Lee’s 2.5-year prison sentence. A special prosecutor had indicted the Samsung heir on charges of bribing a friend of former President Park Geun-hye in return for government backing for a merger that helped cement his control over Samsung while his father was hospitalized.In 1967, Lee Kun-hee married Hong Ra-hee. In addition to children Jay Y. and Boo-jin, he had a daughter, Lee Seo-hyun. Another daughter, Lee Yoon-hyung, died in 2005 at age 26.(Updates with share reactions in eighth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.