Samsung Electronics Co Ltd’s (005930.KS) shares fell to their lowest level in nearly two months on Monday after the tech giant told customers to switch off and return their new Galaxy Note 7 smartphones due to fire-prone batteries.
Investors had wiped 15.9 trillion won (14.3 billion) off the South Korean firm’s market capitalization as of 0303 GMT, as a series of warnings from regulators and airlines around the world raised fears for the future of the flagship device.
The logo of Samsung Electronics is seen at its headquarters in Seoul, South Korea, July 4, 2016. Photo credit / REUTERS
“Some said initially the Galaxy Note 7 could be the best smartphone ever, but now it’s possible the phone will go down as the worst ever,” IBK Securities analyst Lee Seung-woo said, predicting weak sales in the fourth quarter.
Samsung Electronics’ common shares were down 6.3 percent to 1,476,000 won each after touching their lowest level since July 12, and were on track for their biggest daily percentage drop in more than four years.
Analysts said the recall could torpedo Galaxy Note 7 sales and have a lasting impact on the $211 billion company’s brand image, which could derail a recovery in its smartphone market share against rivals like Apple Inc (AAPL.O).
The global smartphone leader on Saturday urged all customers to turn off their Note 7s and return them as soon as possible as part of the recall which it voluntarily initiated on Sept. 2.