“Your phone is blowing up!” my wife shouted to me from the kitchen.
“Fire in the hole!” I screamed back as I scooped up my children, cradled them, and rolled atop them to shield them from the impending blast. We huddled safely together until enough time had passed — and I was certain that my family was not in clear and present danger.
Then I got up to survey the scene…
There was no sign of an explosion. There was no broken glass or debris, no structural damage or bloody extremities. My dog was happily lapping at my hands. All was well…
Now, I have no connections to terrorism. I live in a safe country estate far from the reaches of any serious attack. I have no dangerous enemies (outside of a few ex-girlfriends, whom I wouldn’t qualify as mortal hazards).
But what I do have is a Samsung phone…
What my wife was trying to tell me was that I had missed a couple of calls in quick succession. We were having a party that night and I had left my phone in the kitchen; my friends simply needed directions to the house. But considering recent events, for a second I literally thought my phone was blowing up.
And based on the news over the last few weeks, I doubt you can blame me…
Here’s what a Samsung Galaxy Note 7 looks like these days:
It’s not quite as elegant as an iPhone.
But these electronic explosions aren’t limited to Samsung. I had a similar issue in my office a few months back with a completely different device. I was sitting at my desk, writing an article like I am today, when I heard a strange hissing sound. I turned around and saw our office hoverboard (yes, we had an office hoverboard) shaking, popping, and smoking.
Thankfully we moved it out onto the fire escape before this happened:
The whole thing exploded, caught on fire, and the Baltimore Fire Department came in to save the building from what could have been a serious problem.
Now, while the damage to our office carpet was minimal, the damage to Samsung’s bottom line and more importantly, brand — is huge. It’s on a scale I haven’t seen.
Reports have shown that $23 billion was completely burned off of the company’s market value. Samsung was expecting to ship almost 20 million phones over the rest of this year and into next year. That could add up to almost $10 billion in lost revenues. That’s a lot… to say the least.
Typically, I would be buying where there is blood in the streets… in this case that means buying shares of Samsung at a fraction of the price.
I wouldn’t be alone, this is a huge company that can easily recover from even the worst type of scandal. But don’t just ask me, ask Duncan Robertson, portfolio manager at TT International, who is part of the Asia Pacific Equity Fund.
“Samsung offers exceptional value; we have added to our position. The battery issue can only be a long-term threat if the company doesn’t take the correct steps to restore its brand. We have confidence that they have taken the correct steps so far.”
So if you want to buy into Samsung (OTC: SSNLF), I wouldn’t blame you. But I have something far better…
