The Samsung Galaxy S5 Lacks Staying Power

Three Fools take to the Internet to review the South Korean giant’s questionable tactics, recent results, and an apparent lack of sustained interest in the Samsung Galaxy S5.

Jul 13, 2014 at 4:00PM


After a burst of enthusiasm, operating losses suggest lagging demand for the Samsung Galaxy S5. Credit: Samsung.

Samsung Electronics (NASDAQOTH:SSNLF) saw operating profit fall 24% in the second quarter. Then, earlier this month, a band of thieves made off with $6 million worth of gear in a night raid on the company's Sao Paulo plant -- which seems to be about the only way the company can move the Samsung Galaxy S5 right now. Can investors trust management to produce outsized stock returns?

Guest host Alison Southwick puts this question to Fool analysts Nathan Alderman and Tim Beyers in this episode of 1-Up on Wall Street, The Motley Fool's Web show in which we talk about the big-money names behind your favorite technology, movies, toys, video games, comics, and more.

Nathan says there are good reasons to distrust anything Samsung says. In 2008, Chairman Lee Kun­-hee, son of the company's founder, was convicted of evading $93 million in taxes on $3.8 billion in income, which he allegedly hid in stock accounts under his aides' names. He was also accused, but never convicted, of using a slush fund to bribe government officials. In 2009, South Korea's president gave him a full pardon for this three­year suspended sentence.

Kun-hee is also alleged to have stolen up to $10 billion from Samsung, and to have used company funds to buy up subsidiaries and give them to his son. If any of these allegations are proved true, it would cast even more of a pall over Samsung's stock.

Tim says a huge drop in operating profits raises doubts about the company's earlier claim that it sold 11 million Samsung Galaxy S5 handsets in the first month of release. The company has certainly done its share to confuse the market. As Foolish colleague Ashraf Eassa reports here, rumors of premium variants of the Samsung Galaxy S5 arose even as the handset launched worldwide. Buyers may be waiting to see if these still-unseen handsets have the wherewithal to take on Apple's (NASDAQ:AAPL) forthcoming iPhone 6.

Now it's your turn. Click the video to watch as Alison puts Nathan and Tim on the spot, and then leave a comment to let us know your take on the long-term prospects for the Samsung Galaxy S5. You can also follow us on Twitter for more segments and regular geek news updates!

Leaked: Apple's next smart device (warning, it may shock you)
Samsung's battle with Apple is far from over, but the Mac maker may have an advantage tucked away in its labs. Some early viewers of its newest device are claiming its everyday impact could trump the iPod, iPhone, and the iPad. In fact, ABI Research predicts 485 million of this type of device will be sold per year. But one small company makes Apple's gadget possible. And its stock price has nearly unlimited room to run for early in-the-know investors. To be one of them, and see Apple's newest smart gizmo, just click here!


Alison Southwick has no position in any stocks mentioned. Nathan Alderman and Tim Beyers own shares of Apple. The Motley Fool recommends and owns shares of Apple. Try any of our Foolish newsletter services free for 30 days. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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