Samsung Electronics stock falls after heir Jay Lee is sentenced to jail
- The Seoul High Court sentenced Jay Lee to 30 months in prison for bribery
- With today’s verdict, Jay Lee will be sidelined from controlling Samsung until he serves his jail term
- Samsung Electronics stock price fell 3.41% on Monday after initially trading nearly 5% in the red
Shares of all Samsung-related firms tumbled today after the Seoul High Court sentenced Jay Y. Lee, the Vice Chairman of Samsung Electronics (KRX: 005930) and picked successor of Lee Kun-hee, to two and a half years in prison for bribery.
Fundamental analysis: Jay Lee sidelines
Today’s court verdict will send Lee back to prison after he initially served 1 year for bribery. Jay Lee was initially sentenced to five years in prison before the South Korean Supreme Court overturned the decision and sent it back to High Court.
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However, today’s verdict sentences Jay Lee to 30 months in prison with 12 months he already served likely to be taken into account. According to media reports, Jay Lee was immediately transferred to prison to serve his sentence.
“In a case sent back by the Supreme Court, there is a narrower range of options for the judges’ bench… but it’s also true that the Supreme Court can’t really touch the final court’s sentencing,” said a lawyer Rha Seung-chul.
The prosecutor’s office said that Lee gave more than $27 million dollars in bribes to the aid of former President Park Geun-hye to ensure a smooth transition of powers at Samsung Group. Jay Lee is the oldest child of Lee Kun-hee, who is credited with the transformation of the Samsung Group into a tech magnate.
“In this case, a company’s freedom and right to wealth were violated due to the abuse of power by the former president,” Lee’s lead attorney said in a statement given by Samsung Electronics.
With today’s verdict, Jay Lee will be sidelined from controlling Samsung until he serves his jail term.
Technical analysis: Shares plunge
Samsung Electronics stock price fell 3.41% on Monday after initially trading nearly 5% in the red on the Lee news. On Friday, the stock fell 1.9% despite trading higher earlier in the session.
Still, shares of Samsung Electronics are up almost 5% this month after gaining about 70% in November and December. Given the fundamental drivers, we may see a pullback extending to 81500.
Samsung Electronics share price fell today after the heir to Samsung Group Jay Lee is sentenced to 30 months in prison for bribery.