Judge rules shareholders can sue Apple for 'misleading' 2018 iPhone demand statements
Apple must face part of a lawsuit alleging that it fraudulently concealed weakening iPhone demand in the fall of 2018, a judge ruled on Tuesday.
Credit: Apple
The lawsuit centers around claims of "misleading" statements made by Apple executives, including CEO Tim Cook in 2018 that lead to an artificially inflated share price. When Apple issued a revenue guidance in January 2019, the stock prices fell and led to material losses for shareholders.
According to Reuters, U.S. District Judge Yvonne Gonzalez Rogers dismissed most claims in the lawsuit in but ruled that Apple can be sued by shareholders over comments that Cook made indicating strong iPhone demand -- especially in China -- just a few days before the company curbed production at some of its manufacturers.
"Absent some natural disaster or other intervening reason, it is simply implausible that Cook would not have known that iPhone demand in China was falling mere days before cutting production lines," Rogers wrote.
She added that it is "also implausible that Cook was unaware of emerging market issues in China despite admitting two months later than the Company observed worrying signs" during the period.
Additionally, Rogers said that Apple's decision to stop reporting individual iPhone unit sales "plausibly suggests that defendants expected unit sales to decline."
During the call, Cook said that current iPhone models at the time had a "really great start," but denied that certain markets, like China, were feeling downward sales pressure.
The lawsuit was lodged in the U.S. District Court for the Northern District of California after the aforementioned January 2019 revenue revision. It is led by the Employees' Retirement System of the State of Rhode Island, but represents all shareholders.
It alleges that by the middle of November 2019, Apple had instructed assembly partners Foxconn and Pegatron to cut production for new iPhones and materially reduce shipments.
In January 2019, Apple issued a rare revenue guidance revision, bringing its forecast for the first quarter to $84 billion, down from an original prediction of $89 to $93 billion. In a letter to shareholders, Cook said that lower-than-expected revenue, particularly in China, accounted for it.
In the wake of that guidance revision, Apple shares dropped up to 10%, though the stock price nearly recovered by the end of January.
Credit: Apple
The lawsuit centers around claims of "misleading" statements made by Apple executives, including CEO Tim Cook in 2018 that lead to an artificially inflated share price. When Apple issued a revenue guidance in January 2019, the stock prices fell and led to material losses for shareholders.
According to Reuters, U.S. District Judge Yvonne Gonzalez Rogers dismissed most claims in the lawsuit in but ruled that Apple can be sued by shareholders over comments that Cook made indicating strong iPhone demand -- especially in China -- just a few days before the company curbed production at some of its manufacturers.
"Absent some natural disaster or other intervening reason, it is simply implausible that Cook would not have known that iPhone demand in China was falling mere days before cutting production lines," Rogers wrote.
She added that it is "also implausible that Cook was unaware of emerging market issues in China despite admitting two months later than the Company observed worrying signs" during the period.
Additionally, Rogers said that Apple's decision to stop reporting individual iPhone unit sales "plausibly suggests that defendants expected unit sales to decline."
During the call, Cook said that current iPhone models at the time had a "really great start," but denied that certain markets, like China, were feeling downward sales pressure.
The lawsuit was lodged in the U.S. District Court for the Northern District of California after the aforementioned January 2019 revenue revision. It is led by the Employees' Retirement System of the State of Rhode Island, but represents all shareholders.
It alleges that by the middle of November 2019, Apple had instructed assembly partners Foxconn and Pegatron to cut production for new iPhones and materially reduce shipments.
In January 2019, Apple issued a rare revenue guidance revision, bringing its forecast for the first quarter to $84 billion, down from an original prediction of $89 to $93 billion. In a letter to shareholders, Cook said that lower-than-expected revenue, particularly in China, accounted for it.
In the wake of that guidance revision, Apple shares dropped up to 10%, though the stock price nearly recovered by the end of January.
Comments
When will a judge rule that Trump's constant BS about this drug drove up the value the manufacturers stock value. Apple did less and will sued while Trump gets off without even a hand slap. We all know the judicial system is fixed and there's no easy way to fix it.
At best, this will be a few million slap on the hand fine for Cook. He can afford it. He can sell some of his stock options to cover it.
From a French Institute, with the world's number one expert, Pr. Didier Raoult.
https://www.mediterranee-infection.com/hydroxychloroquine-and-azithromycin-as-a-treatment-of-covid-19/
The rest of the site is in french, sorry about that
Also, here's a study from 2005 about the SARS-CoV 1. Even though COVID-19 is SARS-CoV 2, it seems to work as well.
https://www.ncbi.nlm.nih.gov/pmc/articles/PMC1232869/
If you start searching about Hydroxychloroquine, you'll find a lot of recent disinformation. Especially, right about the time when the Big Pharmas are pushing for a vaccine "to bring back the normality!"... oh please. That being said, this drug has been around for 71 years. Been administered to over 1 billion doses. So lets just say that all side effects are pretty well known... If you search a little more, you'll find that a lot of countries are using it now, those that have said NO to WHO. I think more are coming. WHO is going down... And please, let aside Trump, he has nothing to do with it. He is many things but he is pretty far to be a doctor.
Good luck with that in court.
Any sane judge would send back to school any lawyer that tries to win a case with opinions.