Tepid demand for Samsung Electronics Co.’s newest Galaxy smartphones triggered a fifth straight monthly decline for the electronics maker, wiping out about $44 billion in market value since April.
Shares of the world’s biggest smartphone vendor slumped 8.1 percent this month, extending their longest losing streak since December 1983. Samsung dropped almost $12 billion of value in August alone as the South Korean company surrendered market share to Apple Inc. and Chinese competitors.
Samsung’s decision to steal a march on Apple and advance the release of new Galaxy smartphones failed to dispel pessimism about its second-half earnings. Apple is expected to take the wraps off a new iPhone on Sept. 9 and release it in time for the crucial end-of-year holiday shopping season.
“We all know its smartphone business isn’t doing well,” said Lee Seung Woo, an analyst at IBK Securities Co. in Seoul. “I can’t really figure out when the stock will stop declining. The fundamentals look problematic.”
The stock has been the biggest drag on the 758-member Kospi index in the past six months, leading the benchmark 2.2 percent lower in the period. It ended Friday at 1,089,000 won.
The drop in market capitalization is almost equivalent to the value of General Motors Co.
Samsung profit has fallen five straight quarters, and third-quarter net income is estimated at 5.33 trillion won ($4.5 billion), down from 5.63 trillion won in the three months ended June, according to data compiled by Bloomberg.
Samsung’s global smartphone market share fell more than 3 percentage points in the second quarter, and it no longer is the top seller in China, the world’s biggest mobile-phone market.
It is being undercut at the high end by Apple’s bigger iPhones and at the mid-range and low end of the market by devices from Xiaomi Corp., Lenovo Group Ltd. and Huawei Technologies Co.
Samsung misread demand for the S6 models released in April, failing to produce enough three-sided screens for the Edge while the regular version struggled against the iPhone.
One of its latest models, the Galaxy Note 5, was criticized by reviewers and customers this month as the company acknowledged that the device can break if the stylus is inserted backward into the storage slot.
“Foreign selling of shares is adding pressure on the stock, which now seems attractive value-wise,” said Greg Roh, an anlayst at HMC Investment Securities Co. in Seoul. “The smartphone business isn’t going to worsen further from here, but any rebound seems highly unlikely.”