Samsung Heir Rises To Power As Profits Plunge After Note 7 Recalls

The third-generation heir to the family that owns Samsung, Lee Jae-yong is about to be given more power at his father’s, Lee Kun-hee’s, company and it comes in the middle of a loss worth several billion dollars. Lee will become a part of a nine-member board, which controls the fate of the South Korean giant. Analysts are already wondering what the prince will do when he is finally given a controlling position on Samsung. Some are even saying that Lee or Jay Y, as he is also known, will turn things around for the troubled smartphone maker.

Jay Y’s ascension to power began when his father suffered a major heart attack back in 2014, Bloomberg reports. He already held the position of vice chairman of Samsung Electronics at the time, but he quickly began to gather influence in the months that followed. One of the people who believe that giving Jay Y more power is good for Samsung is chief investment officer at Korea Value Asset Management Co, Lee Chaiwon.

"We can now say that Lee’s regime has officially begun," he said. “I think a new era is coming. The company will become more market-friendly."

For the sake of the smartphone maker, this had better be the case since they are currently facing a loss that could reach $6 billion in total. The company’s stock prospects remain strong as investors seem confident that Samsung can turn this around. However, its profits are still looking grim.

The company’s net profit plunged by 16.8 percent, The Wall Street Journal reports, with only $4 billion raked in for Q3. The loss was a direct result of the disastrous recall of the Galaxy Note 7 smartphones, which led to the mobile division reporting its worst quarterly profit in the history of the Galaxy line.

Samsung also reports that the profit damages will continue for the next six months. Fortunately for the company, display panel and semiconductor sales held steady, which helped prop up the firm as a whole.