The share price of Samsung Electronics dropped nearly 7.5% in trading Monday as investors had their first opportunity to react to the more than $1 billion decision against the Korean electronics giant by a California jury for infringing on Apple patents.
According to CNN, Samsung dropped 6.3% at the open of South Korea’s Kospi index and finished the day down 7.45%, after dropping as much as 7.7%. The tumble erased about $12 billion from the company’s market value Monday.
The share loss comes three days after a jury in San Jose, Calif., delivered a lopsided victory to Apple, awarding the iPhone maker $1.05 billion in damages — a verdict one senior Samsung executive called “absolutely the worst scenario for us.”
“The context of the loss in this case is a lot worse than had been expected,” including the amount of damages Samsung is now facing, said Hi Investment & Securities analyst Song Myung-sup.
The company was disappointed by the verdict and plans to keep the legal fight to have its claims accepted, according to internal memo sent to its employees that was seen by Reuters.
“We’ve sought to settle this through negotiations, as Apple is our customer but had no choice but to counter sue,” the memo said. “There’s no firm in history which has sustained growth by trying to stifle competition with legal fights on patents, rather than fairly compete with innovation in the market place.”
Apple, meanwhile, praised the court for “sending a loud and clear message that stealing isn’t right.”
“The mountain of evidence presented during the trial showed that Samsung’s copying went far deeper than even we knew,” the company said in a statement.
The court decision could lead to the prohibition of sales in the U.S. of Samsung smarphones and computer tablets found to have violated Apple’s patents. A hearing on the matter is scheduled for September 20.
“The ruling is a costly lesson for Samsung – but also an opportunity for a true alternative to Apple’s well-known hardware with more innovative thinking and imaginative products ahead,” Morgan Stanley analysts said in a note.
Top executives at Samsung, led by vice chairman Choi Gee-sung and head of its mobile division JK Shin, held an emergency meeting on Sunday, reports IBN Live.
The biggest concern for Samsung now remains whether its latest flagship product the Galaxy S III, which was not included in the case, will be also targeted by Apple and included in the list of products banned in the US market. The model is Samsung’s best selling smartphone, with sales topping 10 million since its late May debut.
The nine-person jury at a federal court in San Jose, California, found on Friday that Samsung infringed on six of seven Apple patents. The jury spent just two and a half days puzzling out its final verdict, with weeks of notes and memories of testimony, 109 pages of jury instructions, and boxes of evidence including a collection of contested smartphones and tablets as their guide.
The lawsuit is the largest yet in the ongoing worldwide patent brawl between Apple and Samsung, which itself is just one battle in Apple’s war against Google’s Android mobile operating system. On Friday, a South Korean court found that both parties had infringed on each other’s patents, banning the sale of the iPhone 3GS, iPhone 4, two iPad models and Samsung’s Galaxy S2.