Samsung urged by hedge fund to buy back preferred shares in push to close valuation gap

A South Korean hedge fund is pushing Samsung Electronics to do something about a problem that’s been hiding in plain sight: the company’s preferred shares are trading at a roughly 26% discount to its common stock, and the fund thinks a targeted buyback could fix it. Life Asset Management made its case on September 14, urging Samsung to repurchase and cancel its preferred shares. The fund wants the Samsung board to review the proposal at its October meeting, with share cancellations completed by December. The discount problem Samsung’s preferred shares have long traded below its common stock, but the gap has been particularly stubborn. At its widest, the discount hit around 37%. It’s since narrowed to roughly 26%, partly because investors started speculating that buybacks might actually happen. This isn’t just a Samsung quirk. Across more than 100 South Korean firms, preferred shares trade at an average discount of 45% compared to common stock. The reasons are structural: preferred shares typically come with reduced voting rights, thinner liquidity, and the kind of governance questions that make institutional investors squint. Samsung’s $81.8 billion shareholder return plan Life Ass...