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DigiTimes Causes Samsung To Lose $10 Billion Market Value

By - Source: Reuters | B 17 comments

Just one word: oops.

Reuters reports that an article published by DigiTimes caused a 6.2-percent slump in Samsung Electronics shares, eliminating $10 billion off the company's market value. This was the company’s biggest daily fall in nearly four years, closing at a 9-week low of 1.23 million won ($1,100).

Just recently DigiTimes said that Apple placed large mobile DRAM orders with "troubled" Elpida's 12-inch plant in Hiroshima, Japan, thus securing around half of the facilities' total chip production. Once the report went live and the shares began to tank, Samsung reportedly moved the announcement of its new 20-nm DRAM chips -- originally scheduled for Monday -- up to yesterday, May 17, to "quell fears with investors and shareholders."

Naturally Samsung denies the DigiTimes report, claiming that Apple will still use its chips going forward. “The report from Taiwan is exaggerated. Apple is always looking to diversify its part-sourcing channels. In flat screens and chips, Apple is sourcing parts from various clients that include Samsung, however, that doesn’t mean we are losing our edge as Apple’s top-tier client," a Samsung executive told The Korea Times.

Other chip suppliers also took a hit in stock, including SK hynix who saw shares closing at almost 9-percent lower at a 20-week low -- this was the company's biggest one-day drop in nine months. A representative refused to comment on whether Apple had reduced orders from the firm, but merely stated that "we are receiving more orders for mobile DRAM chips from our customers."

U.S.-based Micron Technology is reportedly in talks with Elpida to acquire the Japanese firm as it tries to restructure its business. Tough market conditions and global competition drove it into bankruptcy protection.

"A merged Micron-Elpida could pose a significant threat to South Korean memory chipmakers, and Elpida's huge order from Apple was the spark that triggered these worries," said Lim Dol-yi, an analyst at Solomon Investment & Securities.

Another analyst claims that Apple is maintaining its bargaining power by keeping Elpida up and running, thus preventing Samsung and hynx from dominating the chip market.

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Top Comments
  • 25 Hide
    SmileyTPB1 , May 19, 2012 4:29 PM
    I agree, people have lost sight of "long term investing" and will now dump a company's stock just because there is a report that the forklift operator down at the loading dock says it hurts when he pees.
  • 24 Hide
    Anonymous , May 19, 2012 4:20 PM
    Ha. What a pointless world we live in where an article can negatively affect a business.
  • 17 Hide
    killerclick , May 19, 2012 4:24 PM
    That's funny, bitter competitors in one segment and symbionts in another. And fanboys emotionally invest themselves in corporations, fighting over why it's better to get raped by one rather than the other.

    Don't be consumers, be creators.
Other Comments
    Display all 17 comments.
  • 24 Hide
    Anonymous , May 19, 2012 4:20 PM
    Ha. What a pointless world we live in where an article can negatively affect a business.
  • 17 Hide
    killerclick , May 19, 2012 4:24 PM
    That's funny, bitter competitors in one segment and symbionts in another. And fanboys emotionally invest themselves in corporations, fighting over why it's better to get raped by one rather than the other.

    Don't be consumers, be creators.
  • 25 Hide
    SmileyTPB1 , May 19, 2012 4:29 PM
    I agree, people have lost sight of "long term investing" and will now dump a company's stock just because there is a report that the forklift operator down at the loading dock says it hurts when he pees.
  • 10 Hide
    razor512 , May 19, 2012 4:36 PM
    Because of how secretive these companies are with what is going on with them, their market value becomes based largely on speculation, thus a major news source releasing a negative article can cause a lot of trouble.

    anything above the level of the retail and end user is often kept from the public.

    Even when it comes to food, wholesalers and other suppliers have a system set up where you need a special ID in order to see their prices, this is all to keep the consumers from seeing things like a $1.29 bottle of soda only costing the store 40 cents each when they order a case of 500 bottles, or chicken breast only being 24 cents a pound before the retail markup

    many suppliers want to keep their pricing secret from consumers, and they want to keep pricing secret from other businesses so dell or HP doesn't go emo when samsung gives apple a better deal on memory

    the end result of all of the secrecy is speculation having a huge influence (which some companies can use to their advantage, eg apple deleting forum post and refusing to fix bad imac displays a while back in order to hide the face that they messed up on something)
  • 1 Hide
    ta152h , May 19, 2012 5:46 PM
    hotsacomanHa. What a pointless world we live in where an article can negatively affect a business.


    So, you're complaining that the dissemination of correct information is liability, because it can have an effect? What???? You'd prefer no one could say anything, or that no one was allowed to react to what they see? That's better?

    First of all, their business was not negatively affected, their stock price was. That has little to do with their running their business. If the report comes to nothing, the market will react to that. If it does, then it already has. If you hold the stock, and believe in the company, you lose nothing.

    The big losers are the people that bought call options. They just expired on a down day, and that blows. But, really, you know going in that options are speculative, so you can't really complain about it.

    Rather than complain, this is exactly how the market is supposed to work, and is what is good in it. If they were disseminating false information, that would kind of suck, but, even then the market corrects for that. If you buy a stock long term, you already know Apple is going to look for other supplies (they always do), and you know that you can't depend on Apple keeping Samsung profitable, because of the nature of their relationship. So, this is a buying opportunity. If you're a chicken, and don't believe in the company, or something like this shocks you into selling, you should get eaten up by the market, and taught a lesson, so you can come back wiser, and buy stocks you have more conviction with.
  • 0 Hide
    Plasmid , May 19, 2012 6:39 PM
    hotsacomanHa. What a pointless world we live in where an article can negatively affect a business.


    Pointlessness is a inherent nature of life because of death. Well that's if you are an atheist like me.
  • 1 Hide
    alextheblue , May 19, 2012 6:45 PM
    SmileyTPB1I agree, people have lost sight of "long term investing" and will now dump a company's stock just because there is a report that the forklift operator down at the loading dock says it hurts when he pees.

    Wait, wait, it's not supposed to hurt when you pee? DAMNIT!
  • 1 Hide
    willard , May 19, 2012 6:51 PM
    Now would be a really good time to buy Samsung stock. The company is doing just fine, has the GS3 on the horizon (smashing pre-order records already), and this article has dropped the price of stock so you get more bang for your buck.

    I'm guessing their stock will recover rapidly in the coming weeks to months. If you're an investor, get in now.
  • 0 Hide
    maddy143ded , May 19, 2012 6:55 PM
    that article was probably a plant from apple..
    maybe to get better negotiating terms, or maybe keep samsung on its toes.
    who knows, but we have seen it happen many times, these are just pressure tactics from apple.inc
    if apple was so desperate then instead of micron buying out elpida, apple should buy out elpida..
  • 0 Hide
    ben1680 , May 19, 2012 9:36 PM
    Hence the reasons why short term buy and sell stock market investor need to be taxed 95% of their profit. This will curb the speculation and highly inflated share price (due to market perception or rumor). The current stock market system is one of the biggest fraud approved by the government...
  • 0 Hide
    ben1680 , May 19, 2012 9:36 PM
    Hence the reasons why short term buy and sell stock market investor need to be taxed 95% of their profit. This will curb the speculation and highly inflated share price (due to market perception or rumor). The current stock market system is one of the biggest fraud approved by the government...
  • 1 Hide
    ojas , May 20, 2012 4:29 AM
    Hmmm...and apple's stock has been falling for quire a while, no article dedicated to that so far...
  • 1 Hide
    freggo , May 20, 2012 3:46 PM
    ojasHmmm...and apple's stock has been falling for quire a while, no article dedicated to that so far...


    Wait until it reaches Penny Stock level :-)
  • 1 Hide
    eddieroolz , May 20, 2012 5:22 PM
    In other words, investors are anxious about Samsung DRAM's future in Apple products?
  • 1 Hide
    ubercake , May 21, 2012 5:07 PM
    Seriously, does Digitimes effect the business world that much? Digitimes is hardly WSJ. There were probably other factors in play here.
  • 0 Hide
    bin1127 , May 21, 2012 7:14 PM
    SmileyTPB1I agree, people have lost sight of "long term investing" and will now dump a company's stock just because there is a report that the forklift operator down at the loading dock says it hurts when he pees.



    I wouldn't take such symptoms lightly. Prostate cancer is the leading cause of male death, the second being riding sofas down a hill.
  • 0 Hide
    wintard , May 22, 2012 3:24 PM
    Funny how a 'fake' planted 'news' which causes a $10B drop in market cap for Samsung gets top coverage in the media, yet a corresponding $120B drop in market cap for Apple gets virtually no attention?

    Quote:
    http:// seekingalpha . com /article/604251-is-apple-s-stock-manipulated
    Is Apple's Stock Manipulated?
    May 21, 2012
    Today after the stock is down from $644 to $530, I must ask the same question: what do we know today that we didn't know a month ago that caused the stock to lose $120 Billion of its market cap? The obvious answer is: speculation.


    ~~~~~~~~~~
    One of the funny things about the stock market is that every time one person buys, another sells, and both think they are astute.
    ~ William Feather

    Follow the dirt and it leads to money.
    ~ Rene Descartes, French philosopher 1596-1650.
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