South Korean tech giant Samsung has lost $12 billion market value on Friday. The nose dive was due to fears related to slowing sales growth of Galaxy S4.
The share price dropped 6.2 percent on Friday, making it to be the lowest in four months. It was Samsung’s biggest daily percentage drop since August, when the electronics maker received a jury verdict asking it to pay $1.05 billion in fines.
The latest drop in market valuation is caused by low profit growth. Samsung is rumored to be readying several variants of its Samsung Galaxy S4 smartphone to capture various segments of the market. But analysts fear that such moves are coming at the cost of lower profit margins.
Added to this, Competition from the Apple turf is about to get tougher. Apple is rumored to unveil a low-cost iPhone soon. It is also expected to launch a iPhone trade-in program for older phones.
These make the growth prospects of Samsung Galasy S4 bleak. Hence, analysts have downgraded their prior price target for Samsung shares. The result is a $12 billion drop in Samsung’s market valuation on Friday.
Source: Reuters
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