Shares of Samsung Electronics fell by 6.3% after the company announced the recall of its Galaxy Note 7 smartphones. By the session’s close, the South Korean firm's market capitalization declined by 15.9 trillion won ($14.3 billion) to 232.1 trillion won ($210.6 billion).
Earlier, the world's top smartphone maker said that users of Galaxy Note 7 smartphones should turn them off and exchange their devices for new ones through the exchange program.
Samsung has confirmed that it will stop sales and recall all 2.5 million Samsung Galaxy Note 7 devices it has sold worldwide.
“The market certainly thinks this is going to cost more than $1 billion,” said Anthea Lai, an analyst with Bloomberg Intelligence. According to experts’ estimates, the combined cost of the recall and lost sales would cut Samsung's smartphone revenue by $5 billion this year. More seriously, it is a blow to the company’s reputation.
Sales of the Note 7 were halted in 10 countries.
Meanwhile, the US Federal Aviation Administration (FAA) has warned travelers to avoid turning on or charging Samsung Galaxy Note 7 phones while flying, and even stowing them in any checked baggage. Qantas Airways, Jetstar, Virgin Australia and Tiger Airways have also banned passengers from using Samsung Galaxy Note 7 smartphones on board because of concerns their batteries could explode.
