Samsung shares take a dive again on slowing growth, $6.5 billion in value erased

Samsung shares take a dive again on slowing growth, $6.5 billion in value erased
Shares of Samsung electronics started tumbling yet again the second it announced a second quarter guidance that fell short of analysts forecasts. Investors punished the Korean giant by erasing another $6.5 billion of its market value, sending the stock down 3.9% during trading.

This is in addition to the $12 billion it already lost, and to the nine-month low reached when word spread out that the Galaxy S4 orders are falling short of estimates.

Since analysts' models are geared towards the future, each sign of earnings growth slowdown, and Samsung projected Q2 growth to be 48% year-on-year, compared to 61% for Q1, is considered a red flag. The same thing happened with Apple last September, sending the stock down 40% and erasing many billions of market cap from the company.

Not that anyone would sniff at the projected more than $8 billion profit that Samsung is about to announce July 26th, it's just that the high-end market is maturing, and the margins won't be as high anymore, though that is likely to affect all other players, too.

source: WSJ

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25 Comments

1. Sniggly

Posts: 7305; Member since: Dec 05, 2009

This and the Apple stock implosion both illustrate why the stock market is silly. There's only so much room in the market, especially when you're already on top. If you're not making supreme record breaking profits every quarter, investors bail on you. I mean, hell, most everyone in the world has a cell phone now, and a good percentage of those people have smartphones already as well. This has the effect also of making companies feel they are beholden to stockholders more than anyone else, including their own employees and customers. This is how bulls**t like the Enron implosion happens, or how companies like the carriers keep thinking of new ways to jack prices and limit what they give out for those prices.

3. Topcat488

Posts: 1415; Member since: Sep 29, 2012

It's just like what the "Stock Market" was meant too be... A horizontal pyramid, with the top being paid by speculations and manipulation of prices, quantity, or whatever.

10. Googler

Posts: 813; Member since: Jun 10, 2013

Especially after a few days ago it was reported the S4 hit 20 million units sold. Stock market is based more on opinions than actual production these days.

14. Chaseism

Posts: 82; Member since: May 08, 2013

Wait...where are all the posts saying this is the end of Samsung! When this happened to Apple, that's all I read, but I haven't seen a single post on this one. /s Sniggly, you're absolutely right. The value of these companies are starting to rely less on the amount of money they bring in and more on what analysts think of the company. Apple had record profits, but because it wasn't double what they did the year before, analysts freaked out and the stock dropped. Samsung did pretty damn good, but because it wasn't AS good as analysts wanted, their stock is down. Investment companies make money when this happens. We all remember the one investor saying he looks forward to market crashes because they are a boom time to make money. And I also agree, companies are now having to do every little thing that stockholders want instead of innovating. Google...to a very small extend...doesn't have to deal with this. They can still stand to fail on some projects because of the type of company they present themselves to be. Samsung and Apple, on the other hand, cannot fail without hurting their stock price. It's a sick game...

2. haseebzahid

Posts: 1853; Member since: Feb 22, 2012

its called market saturation nothing else

4. _Bone_

Posts: 2155; Member since: Oct 29, 2012

Like Apple Samsung is pimping the stock market, a little further drop and it'll be the time for the company to buy back own shares and thrive when stock is back on the rise with the Note III, flexible displays, groundbreaking Samsung-Intel collaboration, Galaxy watch etc. $380 was the time when smart ppl. bought Apple stock, now's the opportunity to buy some of Sammy's.

5. Cyberchum

Posts: 1037; Member since: Oct 24, 2012

stock market: one crazy pendulum.

6. ddeath

Posts: 170; Member since: Apr 14, 2012

Earnings estimate $8.33 billion profits, stock market gasped at 'slow' growth and stock tumbled. Welcome to the market.

7. shreehari

Posts: 45; Member since: Mar 10, 2013

waited for this from a long time

8. shreehari

Posts: 45; Member since: Mar 10, 2013

wish the company was closed and iphone was available for cheap

16. WHoyton1

Posts: 1635; Member since: Feb 21, 2013

U high!

9. pyradark

Posts: 895; Member since: Jun 10, 2012

Great News!!

12. Dastrix unregistered

Amen to that!

17. WHoyton1

Posts: 1635; Member since: Feb 21, 2013

Yeh its great new that a company is failing and may lay off hardworking staff.....dude stfu and stop being such a fanboy!

11. LordLust187

Posts: 18; Member since: Jul 05, 2013

Apple iPhone is for people who are 70+ years old and Samsung+HTC=Super Badass can Never be Beaten Smartphone that could blow the mind so hard peopled fart jizzz....

20. darkkjedii

Posts: 30969; Member since: Feb 05, 2011

That was about the dumbest comment I've ever read.

25. androidfanboy

Posts: 162; Member since: Jun 24, 2013

That was the dumbest comment I've ever read

13. joey18

Posts: 666; Member since: Jul 20, 2010

samsung make money only the battle with apple so samsung needs to make good phone not 20 at year and cheap quality

15. verbalize

Posts: 150; Member since: May 03, 2013

Samsung welcome the real world. You throw out so many phones with almost the same specs. What's your thinking? All it does is cheapen the whole line of phones. Galaxy S4 Is below par Phone anyway. I know Samsung's targeting little kids and selling them gimmicky specs that they will never use. Just give me a phone that doesn't lag and glitchy.I returned my galaxy S4 after a week. What junk.

18. WHoyton1

Posts: 1635; Member since: Feb 21, 2013

Samsung s4 is a below par phone.....I'm sorry but that's simply rubbish....

21. donfem

Posts: 708; Member since: Mar 30, 2011

How about buying an overrated phone which has nothing comparable to Android flagships, yet clones like you drool over it.

22. verbalize

Posts: 150; Member since: May 03, 2013

Well that's funny. I bought one and it turned out to be garbage. Thank god i was smart enough to get rid of it. So keep Convincing yourself That's it's a great android phone because your stuck with it. LOL.

19. Kevinphantom

Posts: 82; Member since: Jun 17, 2013

Samsung never fails because selling smartphone is a very little tiny work for samsung is also build futuristic weapons ships cars trucks ...... and you know what that means ...

23. zekes

Posts: 230; Member since: Aug 14, 2012

its not samsungs year o well htc sony nokia i see u

24. androidfanboy

Posts: 162; Member since: Jun 24, 2013

Android 4.2 for galaxy s3 delayed again?

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