2024-03-15 21:56:15
It’s a comment from Tim Cook that costs Apple dearly: $490 million. This is the amount agreed to by Apple and the plaintiffs in a class action launched last June.
The origin of this action en justice initiated by a British pension fund dates back to November 1, 2018. In the question and answer session with analysts following the presentation of Apple’s financial results, Tim Cook comments the difficult situation observed in several emerging countries.
Apple Store MixC Shenzhen. Credit Apple.
Apple has seen growing sales pressure there, particularly in a group that includes Turkey, India, Brazil and Russia. These countries suffered a devaluation of their currency which did not do Apple’s business. Tim Cook, who was also asked regarding China, said that he does not consider that this market “falls into that category.” He points out that the last quarter was very solid in China with double-digit growth.
Change of tone two months later. On January 2, Apple publishes a letter for investors in which Tim Cook warns regarding the results which will be revealed at the end of the month. The Chinese situation is no longer as flourishing, Apple admits to having lacked flair and did not anticipate the magnitude of the deceleration in demand in what is its second largest market behind the United States. China is even single-handedly responsible for the setback observed in the upcoming results.
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It’s the Scottish shower for investors. In its complaint, where Tim Cook is accused of having defrauded shareholders, the English fund Norfolk Pension Fund notes that Apple’s market capitalization fell by $74 billion that day.
Apple tried to have the complaint dismissed by arguing that Tim Cook was not commenting on the future situation in China when he praised Apple’s performance in this country during the previous quarter.
Judge Yvonne Gonzalez Rogers did not have the same interpretation. The jurors, she believed, might consider that the Apple boss’s remarks also described a forecast trend for sales, not just an analysis of the past. Still according to the judge, Apple was aware of the deterioration of the Chinese economy – we were in the middle of a trade battle with the United States – and of the statistics which described falling demand among consumers. Apple’s motion to dismiss the case was denied.
Apple preferred to compromise reports Reuters, and close this file with an agreement rather than continuing with this procedure. The amount decided for this settlement will be allocated to investors who purchased Apple shares between Tim Cook’s November comment and his January letter.
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