Palliser urges Samsung to launch US share listing to address preferred stock discount

Activist hedge fund Palliser Capital has urged Samsung Electronics to issue American depositary receipts (ADRs) in the US and use the proceeds to repurchase preferred shares, aiming to narrow the valuation gap with its ordinary shares. Palliser's founder and Chief Investment Officer, James Smith, made this proposal at the Sohn San Francisco Investment Conference, highlighting that Samsung's preferred shares currently trade at a discount of over 20% to its ordinary shares in South Korea.

Smith cited SK Hynix's US-listed ADRs, which trade at a premium of over 40% to its domestic shares, as evidence of potential demand from international investors. This proposal follows a similar call from Seoul-based hedge fund Life Asset Management, which also urged Samsung to repurchase and cancel preferred shares until their valuation discount is eliminated.

Palliser has also called on Samsung and Hyundai Motor, whose preferred shares trade at a discount of nearly 50%, to prioritize preferred-share repurchases within their shareholder-return policies and set explicit targets for narrowing the valuation gap.

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