You’d think your flagship phone exploding would be pretty bad for your stock price, right?
Well, if you’re Samsung, apparently not. Even after multiple replacement models of the Galaxy Note 7 appear to have combusted like the original – forcing major carriers to stop selling the phone and Samsung to reportedly suspend its production – the company’s stock has only dipped 1.5% by midday Monday. Even that’s an understatement: That stock hit an all-time high just last Friday, while the company was still in the midst of the mess.
This chart from Statista shows how this might be possible. Though the Galaxy Note 7 was a major launch for Samsung’s smartphone business, it still represents a fraction of its overall sales, and the business itself remains the largest in the world. More importantly, the company has its finger in many other pies – it’s a major producer of semiconductors, OLED displays (which appear to be in demand), TVs, refrigerators, and many other appliances. It’s huge.
That said, this is a public relations nightmare. There are people who now equate “Samsung Galaxy” with “the phone that explodes,” and that’ll only help rivals like Apple and, now, Google. Is it bad enough to tank the company, though? Right now, probably not.