Samsung’s Problem Facing Unspent Cash Pile

Samsung had reportedly increased their share in the market in the first quarter of 2013. Now, they are facing a problem – a good problem. Just like Apple, the South, Korea-based company has a pile of hard-earned accumulated cash. The problem? how to spend those cash.

After the revenue reports in the first quarter this year, Samsung has a 42% increase in their profit. The company said that their cash equivalent and cash increase about $40 billion at the end of the quarter.

The South, Korea-based company then paid their debts leaving a cash position of $28.5 billion or 31.2 trillion won. Their profit increase was very surprising and eye-popping. It almost tripled their net cash last year.

Samsung shares

With this, analysts are now making their conclusion and predictions. Some say that Samsung will use their accumulated cash to acquire companies to furthermore expand their business and cover more areas like medical equipments and software business. Stockholders are now seeking increase in returns, they are considering an increase in dividend which is currently %1 of the share.

According to director Willis Tsai of TIAA-CREF, they will be asking Samsung “if they plan to keep all that cash,”. TIAA-CREF manages more than $400 million shares of the South, Korea-based company.

Samsung said they will prioritize “investments sustainable for areas like facilities, R&D, and marketing that will help the company solidify or boost competitiveness”.

One comment

  1. February 3, 2014 at 10:18 am

    Samsung has unfortunately lost several cases against their competitors and have to pay huge damages to them, so the profit may not be as great.

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