Samsung stock tumbles despite record profit

Samsung shares tumbled almost 4% on Friday as the company pre-announced record second-quarter earnings that still missed analysts’ sky-high consensus.

It’s true that I don’t like Samsung’s blatant copying of Apple products, but I really do hate Wall St. too. It’s wrong for any company to see their stock tumble because analysts were wrong in their forecasts. It’s happened to Apple when they reported record profits and now Samsung. Analysts should be downgraded, not the companies delivering record profits.

  • “bot [sic] the companies”

  • GFYantiapplezealots

    Samsung is traded on the London Stock exchange, not Wall Street.

  • Nicholas Chan

    Even Samsung is copying how Apple’s stock has been operating.

  • bbum

    There was a wonderful article (which I can’t find) that tracked the accuracy of various analyst’s predictions. There was a marked discrepancy between institutional analysts and independent analysts, with the independents being wildly optimistic or pessimistic (in the way that is so incredibly annoying).

    As it turns out, the institutional analysts are beholden to regulation to the point that their predictions have to be based on actual, working, math. The independents, however, can basically make stuff up.

    Here is an example (but not the article I remember):

    • alextheukrainian

      What does it matter? Their “actual, working math” is based on a guess. I.e., guess how many units will be sold, multiply by price, subtract scaled-up expense. Math as it is, it’s still based on guesses.

      But the point of the article is that Samsung made record profit. They RAKED in the money. Just like Apple does. To drop stock price over that is insane.

      That said, there are other reasons, I’m sure. Like iOS 7. See, Samsung is coming out with Tizen – everyone knows that’s not gonna compare. And they can’t do iOS 7-like look without for sure looking like copycats. So Apple is forcing them to innovate – and that may be a problem for Samsung. Investors know that, hence the stock price decline. My theory, anyway. Not to mention the recent news of Apple hiring a French fashion designer and Tim Cook’s spiel on the exciting future of wearables. Something’s cooking, and Samsung hasn’t announced anything in that arena yet – that ought to scare investors, too.

      • bbum

        The institutional investors use math that is based on actual evidence and rules. Sure, still guesses, but educated guesses. Their estimates tend to be rational and, as that article gives an example, the institutional investors tend to be relatively close to the mark and consistently err on the side of too little revenue for company’s whose growth defies what was thought possible.

        The independent analysts, however, are not nearly so rational and constantly make up sensational numbers with little to no rational reason for them.

        That any company’s stock would consistently be moved by multiple percentage points because of the #s that the independent analysts pull out of thin air is flat out ridiculous.

        • alextheukrainian

          Independents were more right about Apple than “real” analysts over the past 5 years. There was an article that researched this, can’t find link now :/

          But the point Jim is making is that stock shouldn’t go down on record profit, period. Who cares who made the predictions. Predictions, by definition, are guesses. It’s not like Samsung shipped less S4s than S3s – they shipped a whole lot more. They’re doing great, profit-wise, yet share price goes down. THAT is the boggling notion.

  • lucascott

    Samsung loves to copy Apple. This time I don’t mind so much. Lol

  • Moeskido

    Stock manipulation is a shitty thing to do to any company, because it affects everybody.

  • Is it wrong that companies stock goes up because analysts are wrong? Well, yes, but as long as that happens, then the flip-side is also going to happen.

    What seems wrong to me is that “the market” seems to be consistently influenced by analyists who’se analysis is about as accurate as a stopped clock.