Samsung stock drops after US warns of fiery phones

By Barry Eitel

SAN FRANCISCO (AA) – Samsung lost more than $10 billion in market value Friday after the Federal Aviation Administration (FAA) warned owners of the company’s Galaxy Note 7 smartphone they should not use them on airplanes.

“In light of recent incidents and concerns raised by Samsung about its Galaxy Note 7 devices, the Federal Aviation Administration strongly advises passengers not to turn on or charge these devices on board aircraft and not to stow them in any checked baggage,” the agency said Thursday.

Though the memo was a suggestion, not a mandate, it added to Samsung’s massive headache as the South Korean company issued a worldwide recall of 2.5 million Note 7 smartphones after owners reported the batteries could explode.

The company’s stock had been holding up relatively well, considering the size of the blunder, but the notice from the FAA caused Samsung shares to plunge nearly 4 percent Friday. Samsung closed Friday with a market value of $199.3 billion, down from $210 billion Thursday.

In response, Samsung announced Friday that it was expediting new, less flammable versions of the Note 7 to customers in the United States.

“We are aware of the Federal Aviation Administration’s statement about the Galaxy Note7,” the company’s U.S. division said in a statement. “Consumer safety and peace of mind are our top priority. We plan to expedite new shipments of Galaxy Note7 starting from this week in order to alleviate any safety concerns and reduce any inconvenience for our customers,” it added.