Samsung all out to buoy its shares amid battery crisis

[THE INVESTOR] Tech giant Samsung Electronics is striving to minimize the impact of the recent battery fiasco, which is expected to significantly undermine its profits.

The largest smartphone maker by revenue has nominated Samsung heir apparent Vice Chairman Lee Jae-yong as a board member, signaling his bigger role in the firm’s management.

After the announcement of the nomination, Samsung’s shares increased 4.23 percent to 1,527,000 won on Sept. 13.

The tech giant saw its stock drop 6.98 percent to 1,465,000 won on Sept. 12 over the firm’s ongoing battery crisis.

"The declaration of Samsung’s responsible management through the nomination of Lee as a board member will serve as a boost to its share price, which suffered from the management vacuum due to the hospitalization of Samsung chairman Lee Kun-hee,” said Yoon Tae-ho, an analyst from Korea Investment & Securities.

Samsung also reportedly applied at Korea Exchange, the nation’s sole securities exchange operator, to buy back its own shares, totaling 65,000, after it purchased the same amount of stocks on Aug. 24 and 25.

As reports of the Galaxy Note 7 battery catching fire or exploding have surfaced since Aug. 24, the smartphone maker announced that it would recall a total of 2.5 million Note 7 units, including those already shipped to sellers and sold to consumers around the world.

Some analysts anticipated the recent battery issue will likely cost Samsung around US$5 billion.

By Kim Young-won (wone0102@heraldcorp.com)