SEOUL / SAN FRANCISCO — October 14, 2026 — Samsung Electronics is facing mounting pressure from activist investors to overhaul how it rewards shareholders, with Palliser Capital urging the South Korean technology giant to pursue a US stock-market listing and use the proceeds to buy back discounted preferred shares.
The proposal comes as investors identify more than $60 billion in potential value across South Korea’s preferred-share market, a valuation gap that Palliser believes could be narrowed through better corporate governance, targeted share repurchases and more efficient use of capital.
At the center of the campaign is an unusual disconnect in Samsung’s stock market valuation.
Although Samsung’s preferred shares offer substantially similar economic rights to its ordinary shares, they trade at a discount of approximately 26%, according to Palliser’s October 13 presentation.
The difference has become increasingly difficult for activist investors to ignore as Samsung benefits from extraordinary demand for artificial intelligence memory chips and prepares to distribute potentially tens of billions of dollars to shareholders.
Palliser’s argument is that Samsung may be overlooking an opportunity to create shareholder value even without increasing its semiconductor sales.
Palliser Wants Samsung to Raise Money Through US-Listed Shares
Palliser Capital founder and chief investment officer James Smith outlined the proposal at the Sohn San Francisco Investment Conference.
The activist investment firm wants Samsung to explore issuing American depositary receipts, or ADRs, that could trade in the United States.
The objective would be to attract international investors willing to pay a premium for easier access to Samsung shares.
Samsung could then use the proceeds to repurchase and cancel preferred stock trading at a significant discount to its ordinary shares.
The approach could reduce the number of preferred shares outstanding and potentially improve capital efficiency.
However, the proposed strategy depends on investors paying an attractive price for the ADRs, favorable transaction economics and the company’s willingness to proceed.
It also requires careful evaluation of possible dilution, listing costs and regulatory requirements.
The proposal remains an activist investor recommendation, not a confirmed Samsung transaction.
Why Samsung’s Preferred Shares Trade at a 26% Discount
Samsung has two principal publicly traded share classes: ordinary shares and preferred shares.
Ordinary shareholders generally hold voting rights, allowing them to participate in important corporate governance decisions.
Preferred shareholders typically do not have those voting rights, although their shares offer substantially similar economic exposure and certain dividend preferences.
Because of this structural difference, the two classes can trade at different prices.
Palliser argues that Samsung’s preferred-share discount has become excessive relative to comparable securities in developed international markets.
According to the firm’s presentation, Korean preferred shares trade at an average discount of approximately 46% compared with ordinary shares.
By contrast, preferred-share discounts in markets such as the United States, United Kingdom and Canada average less than 5%, according to Palliser’s analysis.
The comparison helps explain why the activist firm views the valuation gap as a corporate governance and capital-allocation problem rather than simply a normal reflection of voting rights.
Nevertheless, market structure, liquidity, shareholder rights and differences between securities can influence these discounts.
Closing the gap is not guaranteed merely by increasing share repurchases.
More Than $60 Billion in Potential Value Across South Korea
Palliser estimates that more than $60 billion of potential shareholder value could be unlocked if Korean preferred shares traded at parity with their ordinary-share counterparts.
That estimate applies to the wider Korean preferred-share market, not Samsung alone.
The figure is also a theoretical valuation opportunity rather than cash currently held by Samsung or a guaranteed amount available for shareholders.
The firm argues that narrowing these discounts could improve capital efficiency and strengthen international investor confidence in South Korea’s stock market.
This campaign comes amid the government’s Corporate Value-up initiative, introduced in 2024 to encourage Korean companies to improve shareholder returns, governance and market valuations.
The broader initiative seeks to address the so-called Korea Discount — the tendency of certain Korean companies to trade at lower valuations than comparable international businesses.
Palliser believes preferred-share reform should become a more prominent part of that effort.
Hyundai Motor Also Faces Pressure Over a 48% Share Discount
Samsung is not the only major Korean company facing Palliser’s demands.
The investment firm is also targeting Hyundai Motor, where three preferred-share classes trade at an average discount of approximately 48% to their ordinary-share equivalents.
Palliser wants both companies to prioritize preferred-share repurchases and cancellations while these valuation gaps remain elevated.
The firm also wants explicit preferred-share discount reduction targets included in future shareholder-return plans.
For Samsung, Palliser specifically called for a discount target in its fiscal 2027–2029 shareholder-return framework, referring to a 10% target the company announced in 2015.
Palliser has disclosed that it owns both ordinary and preferred shares in Samsung and Hyundai.
That financial interest means it could benefit if the discount narrows, although the firm argues that improved capital allocation would benefit shareholders more broadly.
Samsung’s Record AI Profits Add Pressure for Bigger Shareholder Returns
Palliser’s campaign comes during an exceptional earnings period for Samsung.
On October 7, the company projected third-quarter operating profit of approximately 107.4 trillion won, equivalent to about $80.2 billion at the exchange rate cited by Reuters.
That represented an increase of roughly 783% compared with the previous year.
The surge was driven largely by booming demand for advanced memory chips used in artificial intelligence computing and data centers.
Samsung’s quarterly revenue was projected at approximately 195 trillion won, supported by higher semiconductor prices and continuing demand from major technology companies.
The earnings outlook has reinforced investor expectations that Samsung can generate substantial cash flows.
However, the AI boom also presents risks.
Higher memory-chip prices have increased costs for other Samsung divisions, including smartphones and consumer electronics.
The semiconductor industry also remains cyclical, meaning unusually strong profit margins may not be sustainable indefinitely.
Investors are therefore assessing not only Samsung’s earnings potential but also how effectively management will return capital to shareholders.
Samsung’s $67-Billion to $82-Billion Shareholder Return Commitment
Palliser has highlighted Samsung’s announced shareholder-return commitment of approximately 90 trillion to 110 trillion won, equivalent to roughly $67 billion to $82 billion.
The activist investor believes this substantial financial commitment creates an opportunity to prioritize discounted preferred shares.
Its proposals include redirecting remaining 2026 shareholder-return resources toward preferred-share repurchases, rather than focusing primarily on ordinary shares.
The objective would be to purchase and cancel securities that Palliser regards as undervalued.
However, management must balance that proposal against other priorities, including research and development, semiconductor manufacturing investment, dividends and employee compensation.
Not every share repurchase automatically produces the same benefit.
For example, buying shares for employee stock-based compensation differs from permanently cancelling shares to reduce the outstanding share count.
Samsung’s shareholder-return framework therefore remains central to the debate.
Samsung’s Earlier Buyback Decisions Highlight the Dispute
Samsung’s public disclosures show that it has continued implementing share repurchase activities.
In August, the company announced a repurchase of approximately 53.29 million ordinary shares, valued at nearly 15 trillion won, with the stated purpose of supporting employee stock-based compensation.
That program was scheduled to run from August 24 through November 21, 2026.
Palliser’s preferred-share proposal would represent a different use of corporate capital.
Rather than acquiring ordinary shares for compensation-related purposes, the activist firm wants Samsung to purchase and cancel discounted preferred stock.
The distinction matters because cancelling outstanding shares can permanently reduce the number of shares participating in future profits.
Whether the strategy ultimately increases value depends on the purchase price, the financing arrangements and the broader effects on shareholders.
Another Korean Hedge Fund Has Already Challenged Samsung
Pressure on Samsung’s preferred-share policy began before Palliser’s latest proposal.
In September, Seoul-based Life Asset Management urged the company to repurchase and cancel preferred shares to address their discount to ordinary stock.
According to Bloomberg, the fund asked Samsung’s board and management to evaluate the proposal and consider cancelling the shares by December.
However, the Seoul Economic Daily reported on October 1 that Samsung had provided a noncommittal response.
The company reportedly faced internal concerns about whether focusing buybacks on preferred shares would unfairly disadvantage ordinary shareholders.
That dispute demonstrates why Palliser’s proposal could become a broader debate about shareholder treatment.
While targeted repurchases may improve financial efficiency, company directors must consider the interests and rights of different shareholder groups.
SK Hynix’s US Listing Offers a Potential Blueprint
Palliser’s proposal also comes after rival semiconductor manufacturer SK Hynix completed a landmark US stock-market listing.
Reuters reported in July that SK Hynix raised approximately $26.5 billion through a Nasdaq offering.
The transaction increased attention on the potential benefits of providing international investors with easier access to Korean semiconductor shares.
According to Bloomberg’s October 14 report, SK Hynix ADRs were trading at a premium exceeding 40% relative to the company’s Seoul-listed shares.
Palliser sees that premium as evidence that international demand for Korean memory-chip stocks could support a similar opportunity for Samsung.
But the valuation gap does not guarantee that Samsung could achieve the same premium.
Investor demand, transaction structure, the amount of new shares issued and prevailing semiconductor market conditions would influence the outcome.
A US listing would also introduce additional reporting, legal and administrative obligations.
Why This Matters to Global and Philippine Investors
The dispute extends beyond Samsung’s immediate shareholders.
It highlights a growing global debate about whether profitable companies are using excess capital effectively.
For investors in the Philippines and elsewhere in Asia, the discussion is relevant because Korean technology companies are major participants in regional equity indexes and international investment funds.
Changes in Samsung’s valuation, shareholder-return policies and corporate governance could influence investor perceptions of South Korea’s broader market.
However, Philippine investors considering foreign equities must also account for currency movements, brokerage access, taxation and investment risks.
An ADR listing could make Samsung more accessible to investors using US brokerage platforms, but the structure and availability of any future securities would depend on the final transaction.
Investors should not assume that a US listing or additional buybacks would automatically increase the stock price.
Five Developments Investors Should Watch
1. Samsung’s response: Whether the company formally considers Palliser’s ADR and preferred-share repurchase proposal.
2. The 2027–2029 shareholder-return plan: Whether management adopts explicit targets for narrowing the discount between preferred and ordinary shares.
3. US listing discussions: Whether Samsung moves beyond preliminary exploration toward a confirmed ADR transaction.
4. Future buyback allocations: Whether the company increases preferred-share repurchases or continues prioritizing ordinary shares.
5. The wider Korean reform campaign: Whether other companies, including Hyundai Motor, respond to calls for stronger shareholder protections and more efficient capital allocation.
The Bigger Picture: Samsung’s Next Battle Is About Who Benefits From Its Success
Samsung’s extraordinary semiconductor earnings have reinforced its importance to the global artificial intelligence economy.
But the company’s success has also brought renewed scrutiny of how it distributes financial benefits among different classes of shareholders.
Palliser argues that the persistent discount on preferred shares represents an overlooked opportunity to create value and strengthen corporate governance.
The proposed solution — issuing US-listed securities and using the proceeds to retire discounted preferred stock — could become a significant test of Samsung’s approach to shareholder returns.
Yet the plan involves important questions about financing, dilution, fairness and regulatory obligations.
There is no guarantee that Samsung will adopt it or that the proposed transactions would deliver the expected benefits.
Samsung may be generating record profits from the global AI boom, but the next major shareholder battle could be fought not over semiconductor technology — but over a 26% valuation gap and whether Korea’s biggest companies are prepared to rethink how they reward investors.
