Foreign investors are dumping Samsung shares worth billions

As one of the leading companies in South Korea and the world, you can imagine why investors from across the globe like to purchase shares in Samsung Electronics. It provides them with an opportunity to share in the success, as this Samsung company is the conglomerate’s cash cow, making everything from mobile devices to high-bandwidth memory.

However, recent business headwinds seem to have spooked invested based out of South Korea, who have now begun to dump shares of Samsung Electronics worth billions of dollars. This trend is expected to continue in the absence of buyers willing to pick up the stock at current prices.

Over $1.7 billion worth of Samsung Electronics stock sold this month

Foreign investors were the biggest buyers of Samsung Electronics stock between November 2023 and May 2024, scooping up $8.72 billion worth of shares. The average purchase price is estimated to be 75,942 won or $54.99. Samsung Electronics stock is down nearly 8% year-to-date, ending at 73,500 or $53.22 at end of business today.

The stock has traded below that average purchase price for a few weeks now. Foreigners have been closing their positions, selling 2.37 trillion won or $1.7 billion worth of Samsung Electronics shares since May 9. They dominated the selling side in today’s trading session as well. With fewer buyers in the market at current prices, this may lead to a further decline in share price, prompting more foreign investors to close their positions.

There are a few factors behind the lagging share price. From concerns about Samsung falling behind SK Hynix in the high-bandwidth memory race to potentially failing NVIDIA’s quality tests for HBM3E memory.

There’s also the risk of the first-ever strike at Samsung Electronics by the National Samsung Electronics Union, with 90% of the union’s members belonging to the semiconductor division. Since semiconductor manufacturing is a very lengthy and precise process, even the most minor disruptions could cause a snowball effect that leads to product issues.

It’s the combination of this risk and the negative sentiment that’s driving down Samsung’s stock price, even as local and foreign analysts maintain a higher price target for the stock at 105,000 won or $76, since the fundamentals of Samsung Electronics’ business are still rock solid.