Samsung’ shares dip ends up Galaxy Note 7 life

Investors burned off $20-billion of Samsung Electronics’ market value on Tuesday as its shares closed down 8%, the biggest single-day decline since 2008. 

"This is the first time that I have seen a product recall go this badly wrong," financial analyst Richard Windsor said in a note to clients. “When it comes to the damage that it will do to Samsung’s brand, we are in uncharted territory”.

In September, the company recalled 2.5 million of the devices to replace batteries that were catching on fire, but after reports replacements also burst into flames, the company discontinued the product. Estimates are that four million of the devices were sold worldwide.

“ [We] have decided to halt production and sales of the Galaxy Note 7 in order to consider our consumers’ safety first and foremost,” the South Korean firm said in a filing to the Seoul stock exchange. The world's biggest smartphone maker said Tuesday it was killing off the phone entirely.

The Galaxy Note 7 has been a public relations disaster for Samsung, but a boon for Apple, which is likely to pick up market share as Samsung struggles to rebuild its reputation.
Apple's market share gains from Samsung's problems are likely to be long term, Credit Suisse analyst Kulbinder Garcha said Monday.

The South-Korean company released a statement over its Q3 forecasts on Wednesday. Operating profit for the third quarter of 2016 is now estimated to come in at 5.2 trillion won ($4.6 billion), down 33 percent from the previous figure, while revenue expectations have been slashed by 2 trillion won to 47 trillion ($41.8 billion). The won or the Korean Republic Won is the currency of South Korea.