Note 7 Explosions & Recall drops Samsung Valuation by $14.3 billion within 2 months
After the launch of some of the best smartphones of the year like the Galaxy S7, s7 edge and the Galaxy Note 7, Samsung‘s valuation was sky high in the market. Investors started to show up after the launch of these phones. Yes, Samsung was indeed doing an exceptional job out there. But after all the Explosion and recall issues of the Galaxy Note 7 from the past couple of days, the same can’t be said now.
Things started to change for the company, soon after the explosion issues started popping up out of nowhere. One after the other, just within a matter of 2-3 days, more than a few showed up and it was a complete mess. A phone which was appreciated for what it was, soon was ignored because of the battery issues. So without a doubt, the shares were definitely going to fall straight on its face. Well, that’s what happened.
The company’s shares are now at their lowest point in two months. Samsung’s valuation now dropped upto 14.3 billion. As of now, the shares are currently off 6.3-percent on the day and are now trading at the $1,321.02 each. It is noted that this is the lowest the stock has ever been at since July 12th. Samsung’s investors are probably going through all the facts here and this was well predicted by the analysts anyway. Moreover, the recent launch of the Apple iPhone 7 and the iPhone 7 Plus is also one of the reasons for this major downfall.
Analysts have figured that after the costs of the recall, Samsung will lose close to $4.5 billion in revenue. Again, a very predictable number since it is estimated that over 2.5 million units of the device have been sold. This is indeed a huge blow to the company especially after a that a had great kick-start to the year. So, all it takes are a few defective batteries and improper quality checks to bring down a company from its glorious days. Do make a note that company has now reported that all the defective units will be remotely deactivated. Hence it is advised that everyone return their devices if they haven’t already.