Samsung to repurchase $2B in shares as investors worry about declining Galaxy sales

Samsung on Wednesday announced that it will be repurchasing $2 billion worth of its own common and preferred stocks to increase shareholder value through securing share price stability. Samsung investors have become increasingly worried in recent months as the South Korean electronics maker has faced declining Galaxy smartphone sales.

Samsung will be buying back 1,650,000 common stocks and 250,000 preferred stocks, representing 1.1% of its total number of issued shares, as part of the repurchase program. The move is not uncommon among major tech companies, with Apple announcing its own dividend and share repurchase program two-and-a-half years ago under Tim Cook’s leadership.

Samsung last month reported a 74% drop in mobile profits during the third quarter, primarily because Galaxy S5 sales have been 40% worse than expected and 25% less than the Galaxy S4. The company has been facing increasing competition from Apple, especially with the iPhone 6 and iPhone 6 Plus, and cheaper Chinese rivals such as Xiaomi, Lenovo and Huawei.

The stock buy-back program should at least somewhat calm the nerves of investors that are worried about Samsung’s declining smartphone business, and isn’t the handset maker’s only planned move. Samsung recently confirmed that, starting next year, it will sell 30% fewer smartphone models to cut costs and streamline its product lineup, consisting of dozens of devices.

The repurchase program is part of $8 billion in proposed deals overseen by Samsung vice chairman Lee Jae Yong.