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Business

U.S. hedge fund calls for Samsung break-up

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Business

U.S. hedge fund calls for Samsung break-up

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COMING UP:U.S. hedge fund calls for Samsung break-up

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Transcript

00:00:02
>> Samsung is feeling the heat, and the recall of 2.5 million Galaxy Note 7s due to fire prone batteries, isn't its only problem. On Wednesday, Elliott Management, one of the most aggressive activist hedge funds in the US, urging the South Korean conglomerate to break up. Reuters hedge fund reporter, Michael Flaherty, details what Elliot wants.
00:00:26
>> The technical term is a demerger. You can call it a split up or a break up. They want a holding company that oversees all of the various divisions, and an operating company, and actually want the operating company to list here in New York on NASDAQ. So they're really going after Samsung, which, right now, according to Elliot is under-performing.
00:00:43
>> In other words, Samsung's organization is so complex, that it's keeping a lid on shareholder value. But a fight with a hedge fund, not where Samsung needs to focus It's energy right now. The family run company is in the midst of transitioning to a new leader, with a current chairman who's been bedridden since a 2014 heart attack, expected to pass power on to his son.
00:01:07
And, that's not all. Samsung's main software partner, Google, is making another attempt at it's own phone with the new Pixel. And arch-rival Apple, is reportedly planning to open it's first store in South Korea. Not the time to take on a formidable Wall Street opponent.>> So Elliot is one of the biggest hedge funds.
00:01:26
It famously commandeered a ship in Argentina, they went after the Argentina government over a bond investment that Eliot was invested in, it took them 15 plus years to finally sort that out. They've gone after big oil companies like Cass. They've gone big after big tech companies like EMC.
00:01:46
They really have succeeded in a lot of their campaigns.>> Samsung, facing a tough time all around, just as a turn around plan was starting to take shape.