More than $7B was wiped off the market value of Samsung Electronics (OTC:SSNLF) today after it delayed shipments of its premium phone offering amid reports of exploding batteries that could catch fire while charging.
The South Korean-based electronics maker began taking pre-orders for the Samsung (OTC:SSNLF) Galaxy Note 7 earlier this month and the device officially launched on August 19th. However, it’s quickly hit a big roadblock.
Apparently, the device has a battery flaw, one that could allow for batteries to explode and catch fire while charging. As a result, the company has halted sales of the Note 7 in 10 countries and has also issued a recall.
Samsung has already shipped 2.5 million units of the Note 7, and the company’s mobile division president Koh Dong-jin said that while he’s not sure how much it will cost, “it pains my heart that it will be such a big number.”
At this point in time, there’s no telling what this will do to both earnings and profits at Samsung and what other implications it could carry beyond that. Although it’s almost certain to be a turn off for consumers. Had this happened to Apple, it would be on the front page of every news outlet in the country. Luckily for Samsung, they don’t face the same scrutiny, at least in the U.S.
