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4-Traders Homepage  >  Equities  >  KOREA EXCHANGE  >  Samsung Electronics Co Ltd    005930   KR7005930003

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Samsung Electronics Sees $12 Billion in Market Cap Wiped Out After US Courtroom Defeat

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08/27/2012 | 10:06am CEST

--Samsung share-price decline wipes out more than $12 billion from market capitalization

--Shares fall 7.5%, their biggest single-day drop in nearly four years after US court ruling in patent trial against Apple

(Adds closing price in third paragraph, updates company's market capitalization in fourth paragraph and trading activity by local institutions in fifth)

   By Min-Jeong Lee 

SEOUL--Samsung Electronics Co. (>> Samsung Electronics Co., Ltd.) saw more than $12 billion wiped from its market capitalization Monday as its shares were sold off following the company's heavy defeat to Apple Inc. (>> Apple Inc.) in a U.S. courtroom.

Analysts say the legal loss increases uncertainty over the South Korean manufacturer's future products.

The stock opened 6.8% lower and ended down 7.5% at 1,180,000 won, posting its biggest single-day percentage drop in nearly four years. Shares at one point fell by as much as 8% to KRW1,173,000.

The share price decline Monday wiped KRW14 trillion ($12.3 billion) off the company's market capitalization.

Local institutions were big sellers, offloading a net 286,000 stocks. Foreign investors, who hold about half of Samsung shares, and retail investors, were net buyers.

The slide in Samsung shares reduced the company's contribution to the overall capitalization of South Korea's main Kospi index to about 15.7% from 17%.

"The context of the loss in this case is a lot worse than had been expected," including the amount of damages Samsung may now face, said Hi Investment & Securities analyst Song Myung-sup.

U.S. jurors delivered a sweeping victory to Apple, awarding the Silicon Valley company $1.05 billion in damages and providing ammunition for more legal attacks on Apple's mobile-device rivals. Jurors found that Samsung infringed six of seven patents contested in the case.

Should this lead to a sales ban of Samsung's products subject to dispute in the U.S., it will start eating away the company's revenue from the fourth quarter, Mr. Song said. "It will be a difficult battle over a longer period of time."

Analysts said a focal point from here will be whether the patent battle will spread to Samsung Electronics' flagship Galaxy S III phone. The products the U.S. court found infringe Apple's patents are all older mobile devices.

Taurus Investment & Securities analyst Kim Hyoung-sik downgraded his six-month share price target for Samsung to KRW1,600,000 from KRW1,680,000. Mr. Kim pegs near-term support for Samsung's shares in the KRW1,000,000-KRW1,100,000 range.

Share prices of other Asian makers of smartphones running Google Inc.'s (>> Google Inc) Android operating system--which was a part target of Apple's lawsuit--were lower Monday, too. ZTE Corp.(>> ZTE Corporation) closed down 8.2% at 10.01 yuan in Shanghai while HTC (>> HTC Corp) ended off 1.9% at 257.50 Taiwan dollars.

LG Electronics (>> LG Electronics Inc.) bucked the trend and was up 2.8% at KRW69,000 amid expectations it will be able to take market share from Samsung.

Write to Min-Jeong Lee at min-jeong.lee@dowjones.com

Subscribe to WSJ: http://online.wsj.com?mod=djnwires

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Financials ( KRW)
Sales 2017 237 197 B
EBIT 2017 52 328 B
Net income 2017 39 012 B
Finance 2017 71 566 B
Yield 2017 1,40%
P/E ratio 2017 8,94
P/E ratio 2018 8,15
EV / Sales 2017 1,25x
EV / Sales 2018 1,09x
Capitalization 368 886 347 M
Income Statement Evolution
Mean consensus OUTPERFORM
Number of Analysts 40
Average target price 2 916 765  KRW
Spread / Average Target 15%
EPS Revisions
Boo-Keun Yoon Co-President, Co-CEO & Director
Jong-Kyun Shin Co-President, Co-CEO & Director
Oh-Hyun Kwon Chairman & Chief Executive Officer
Sang-Hoon Lee Co-President & Chief Financial Officer
Jae-Yong Lee Director & Vice Chairman-Executive Board
Sector and Competitors
1st jan.Capitalization (M$)
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HTC CORP--.--%1 953
FITBIT INC-21.17%1 319