The aftermath of the Galaxy Note 7 recall was strongly felt Monday after Samsung’s shares dropped to their steepest one-day decline since 2008. Meanwhile, Apple’s stocks emerged to be the biggest price and percentage gainer in midday trade same day.
According to Financial Times, Samsung’s market value fell by $14 billion after the aviation authorities and regulators released official statements warning Galaxy Note 7 owners about the dangers of using the defective handset. The warnings came amid Samsung’s own warning that owners should power down their devices and have them replaced as quickly as possible.
Samsung announced early this month that it is recalling its Galaxy Note 7 devices over safety concerns after instances wherein the handset caught fire or exploded while charging were reported. Just this Saturday, a 6-year-old boy was reported to have suffered burns after the device he was holding in his hands exploded.
As investors worry over the drawbacks of the recall to the tech giant’s market share, the news about Samsung’s market capitalization surfaced. HI Investment & Securities analyst now claims that Samsung’s third-quarter operating profit could suffer $900 million, especially now that the estimated shipments of the device dropped from 12–15 million to just 6 million in the last two quarters, as per CNBC.
Myung Sub Song also said that Samsung could suffer more problems if the new Note 7 (replacements) will come with another problem because this would surely impact sales of the phablet and the upcoming Galaxy S8 that is slated for launch in the first half of 2017.
Amid the financial setbacks, Samsung named Lee Jae-yong as its newest board of directors member. Lee is the son of Chairman Lee Kun-hee, and he is also the South Korean giant’s vice chairman, according to the Wall Street Journal. The decision comes two years after Lee’s father suffered a heart attack leading to him being incapacitated.
On the contrary, while Samsung is seeing huge blows on its market shares, Apple is reversing its previous losses and is now considered the biggest percentage gainer in the Dow Jones Industrial Average, according to Market Watch.