U.S.-based BlackRock Inc., the world's largest asset manager, has secured more than a 5 percent stake in Samsung Electronics Co. This is the first time that the American global investment management firm owns over 5 percent of Samsung Electronics.
BlackRock officially announced on Feb. 7 that it currently holds a 5.03 percent stake, or 300,391,061 shares, in Samsung Electronics with 15 affiliated parties. The company bought additional 2,108,161 shares on Jan. 28 after announcing the ownership of 298,282,900 shares on Jan. 25. As a result, BlackRock now owns about 14 trillion won (US$12.45 billion) worth of Samsung Electronics shares in total based on the closing price on Feb. 7.
BlackRock is the world’s largest asset management company with US$6 trillion (6,747 trillion won) worth of assets under management. The company upped its stake in Samsung Electronics, betting on semiconductor demand recovery. Samsung Electronics saw its sales and operating profit fall by 10.6 percent and 28.7 percent, respectively, year on year in the fourth quarter of last year because of the sluggish demand of memory chips. However, market experts expect that demand for memory chips will go up after the second quarter of this year thanks to the commercialization of 5G mobile communications, higher demand from the information technology (IT) sector, and advance of the artificial intelligence (AI) industry.
The fact that the price of Samsung Electronics shares exceeded 50,000 won (US$44) after the stock split and fell to mid-40,000 won range may have led BlackRock to increase its investment in Samsung Electronics. The company seems to believe that Samsung Electronics shares are undervalued as the South Korean electronics giant can improve performance in the future, though its performance worsened due to a temporary decrease in semiconductor demand.
Meanwhile, BlackRock has become the third largest shareholder of Samsung Electronics, following the National Pension Service with a 9.25 percent stake and Samsung Life Insurance Co. with an 8.24 percent stake. However, BlackRock is not planning to participate in the operation of Samsung Electronics. The company said, “We acquired the shares simply for investment. We will not carry out any activities to exercise our management rights or participate in the operation of the company.”