Samsung was threading along the lines of victory with its Galaxy S7 and S7 Edge sales, but the whole exploding Note 7 fiasco is turning out to be a hellish nightmare for the Korean giant. The insistent bans and safety warnings by various government agencies have alerted the investors of the whole situation, and they’re now flocking to sell off their shares.
The investors have dealt a huge blow to Samsung’s stock prices, which have now hit a two-month low. With the news of over 70 explosions(or overheating) reports on Friday, the stock prices have made a beeline to under $1,300. The Korean company has already lost a ‘whopping $26 billion’ due to the recall of nearly all 2.5 million smartphones it has sold since the launch.
In addition to this, U.S(as well as Indian) regulators have also cautioned users to switch off their devices and refrain from charging them. The aviation authorities around the world have also belted out the decision to not allow the usage or check-in of Note 7 devices on airplanes.
This has, therefore, caused the share prices to plunge over 7 per cent in the period between Friday and Monday. It has currently bounced back and trading in the ballpark of around $1,350(or 15,27,000 KRW) on the Korean Stock Exchange. This flaming new feature of the Note 7 could, however, also effect the overall device sales of the company. Due to the fear of explosion, the populous will now be hesitant while buying a new Samsung smartphone. That’s for sure.
In a hasty move to bring the Note 7 to the market before Apple’s iPhone 7 and then recalling them is already costing them a heartbreaking $1 billion. But, the investor goes on to show that the damage costs could go very well beyond the early estimates of the aforementioned amount. Samsung was of the belief that their latest flagship phablet will help them smoothly sail across the quarter and add an immense value to their portfolio, but it turning out to be worse than anything they could have ever imagined.
If you’re unaware of the situation and still using a Note 7, then let me just say this to you — STOP! NOW!! There have been 35 confirmed cases of battery explosions, and Samsung has itself asked users to stop using the phablet phone. There is a manufacturing defect in the battery where the anode and cathode are coming in contact to cause overheating of the device. The new batteries are expected to be available on Sept. 19.
The company will also be adding an extra ‘S’ to devices which have a replaced new battery(being sourced from Apple’s battery manufacturer) to differentiate it from the defected devices. This, however, could have been avoided if Samsung included a replacable battery to their smartphones(h/t LG!!).
Samsung has also tried to soften the blow of this unfortunate development by announcing the addition of the heir, Vice Chairman Jay Y. Lee, to the company’s board. They’ve also gone ahead to announce that he will officially take over his father’s role as the company’s chief very soon.