Samsung stocks ticked up slightly on the Korean Stock Exchange on Tuesday, making a small rebound from the steep slide triggered by the company’s Galaxy Note 7 woes.
Samsung shares were up 4.23 percent at the close of market on Tuesday, but were still significantly below where they were five days ago. And it’s a steep road ahead.
According to Bloomberg, Samsung lost more than $22 billion of market value in the two-day period from Friday to Sunday, dropping 11 percent. Buzzfeed News reported the total value lost by Samsung in the slide amounted to more than the total valuation of technology company HP.
The stock plunge came on the heels of reports Samsung’s new flagship Galaxy Note 7 device exploded or caught fire while charging. Samsung last week announced issued a worldwide recall of the device after 35 battery-related incidents were reported in the two weeks following the device’s August 19 launch.
The recall includes approximately 2.5 million Note 7 devices sold.
Samsung on Saturday urged all Note 7 users to take part in the device replacement program, citing customer safety.
The Associate Press on Tuesday reported users who don’t exchange their device will be protected via a software update that limits battery recharging to 60 percent. The update will go live for South Korean users on Sept. 20.
But while Bloomberg estimated the recall itself may cost Samsung as much as $1 billion, the real hurt to the company may come in the form of damage to its momentum and reputation.
While Samsung sought to repeat its stellar Galaxy S7 launch performance by beating Apple to the punch, that advantage has now been lost. In fact, Samsung’s refreshed Note 7 roll out will now actually lag availability of Apple’s iPhone 7 by several days. Updated versions of the Note 7 with new batteries are expected to become available on Sept. 19; Apple’s iPhone 7 hits shelves on Sept. 16.
And the publicity around the battery issue likely won’t help Samsung’s sales figures any.
The Note 7 debacle has been splashed all over U.S. headlines and has even caught the attention of U.S. agencies like the Federal Aviation Administration (FAA), which last week warned passengers not to turn on or charge the device during flights. The FAA also asked passengers not to keep the device in their checked bags.
But there’s more going on at Samsung this week.
The company announced an agreement to sell its printer business to HP for $1.05 billion and has also nominated Lee Jae-yong – son of the company’s ailing chairman – to join the company’s board of directors.