Samsung shares witnessed a sharp fall of about six percent to reach their lowest level in two months following the tech giant’s appeal to its customers to return the newly launched Galaxy Note 7 smartphones. The South Korean company recalled about 2.5 million phones last week after reports that the device catches fire during or after charging.
With fears over the future of the flagship device, investors wiped 15.9 trillion won off Samsung’s market capitalization on Monday. The slide in Samsung shares was on course to touch 7.5 percent mark, which would have been their biggest percentage daily drop in about eight years, reports The Wall Street Journal. Some analysts said that the decline was also a result of rising inventories in China and lower orders for chips and components.
Samsung, which is battling the likes of Apple in the smartphone market, is likely to suffer a big blow to its brand image after the Galaxy Note 7 fiasco, writes Reuters. The unprecedented recall might result in a whopping loss of about $5 billion to the tech giant in addition to tanking the sales of the smartphone in the fourth quarter.