1) Apple did not have a 5G phone while China was rolling out 5G across their country. Few would invest lots of money into a product that would soon be obsolete.
.... Tim could have & should have predicted that.
2) The U.S. stirred up geo-political tensions supported by a trade war (justified by bullshit claims of "National Security") where we labelled China and its products a danger to the U.S. So, the Chinese people did what any patriots would do when their country is attacked: reject the products produced by the attacker.
.... Tim could not have predicted all of that. And, even if he did, what would he have said: "American industry will be hurt by our attacks on China"? FauxNews heads would have exploded in outrage.
The United States needs to understand that wars -- whether they are hot, cold, financial or trade -- hurt everybody. The current example: If we push Russia into invading Ukraine, inflation here will soar - partly because we will be paying a lot more for natural gas and gasoline -- along with taxes/debts to pay for our military "protecting" parts of Europe.
But, we won't. We believe we are omnipotent and suffer no consequences for doing stupid things.
So, uh, the fund bought AAPL in July to October time frame of 2018, and then sold AAPL in December of 2018 to March 2019 for it lose money? If they held their AAPL stock or bought AAPL in that time frame, they would have a 400% gain now, in 3 years!
Can't believe anyone has any standing here, and that a judge doesn't throw out the lawsuit as there is no standing whatsoever. This fund manager made the fundamental mistake of buying high and selling low. You win some and lose some as nobody is perfect. Also can't believe fund managers can even be declared a "class".
The class is any owner or Apple stock. They owned tens of millions of dollars of Apple stock. That’s all the standing the pension fund needs. You have no idea what you are talking about and even less knowledge of the legal issues that are involved. You don’t know a single thing about managing a pension fund. You need to stick to tech and leave legal issues, financial and securities law to those who know something about them and have some relevant experience other than being an Apple fanboy.
Seriously, I get it. You’re pissed off and think it’s just another stick your hand in Apple’s wallet lawsuit. It maybe, in which case I hope it dies quickly, but you and most of the rabid fanboys commenting just don’t know too much about this other than you know you are angry.
You questioning where others commenters are getting their data from and their ability to interpret the data was not a good look for you, considering you're actually thinking that Apple Inc. lost over 40% ($450M) of their market cap ..... in ONE day, going by where you got your data from.
That is not what your link stated. It stated that on the day after Apple warning, AAPL was down $450B from its high from last year. Not yesterday. Apple only lost about 10% of it's market cap, the day after the warning. AAPL went from $39.48 to $35.55. Or a drop of about $70B in market cap. Apple market cap at the time of the warning was only about $700B. Which was down 40% from its 2018 high of $1.1T.
AAPL had already dropped from $51.87 on the Nov. 2 2018 date of Apple 4Q 2018 earnings (where the $89B to $93B revenue estimated was announced.) to $39.48 on the date of the warning. The warning came after market closed. The $35.55 for AAPL on the day after the warning, was the low for the year (2019). AAPL never traded any lower than $35.55, for the rest of the year. And the $3.93 drop in AAPL the day after the warning, did not amount to 40% of Apple market cap.
Apple hit the $1T market cap on Aug. 2, 2018 with AAPL at $51.85. At the time of the warning, AAPL all time high was $58.02 on Oct. 3, 2018. Apple surpassed that high on Oct. 11, 2019 with AAPL closing at $59.05. AAPL ended the year at $73.41.
So by not performing it’s due diligence, by not asking follow up questions about what category China would be in, the fund is liable, not Cook or Apple. Doesn’t each earnings call come with a disclaimer that there is speculation involved and not statements of fact?
ah yes! because apple is supposed to time travel into the future so their predictions are 100% correct, with no room for error.
I’m not defending the lawsuit here, but the earnings call was in November and Apple’s now famous profit warning was on January 2nd. There were already rumours of pressure in China, which Cook’s comments brushed aside.
The notion that Apple had no idea they had a problem a mere six weeks out is laughable. It raised questions at the time.
It was not a "profit" warning. Apple warned that (gross) revenue was going to fall about 5% below expectation. Apple never give guidance on future "profits".
As it turned out, even with the 5% shortfall on (gross) revenue, it was Apple Inc. second best quarter based on revenue and profit and a record for earning per share. For sure it would had mostly likely had been the most profitable quarter in Apple Inc. history (at the time), if it weren't for the revenue shortfall. But that is not a certainty.
As it turned out, AAPL ended up higher the day (Jan. 28, 2019) after they reported earning than it was the on the day (Jan. 2, 2019) after Apple Inc. issued the warning. And AAPL finished the year (2019) with a 98% gain. ($39.48 to $73.41) The warning wasn't even a speed bump to AAPL rising share price that year.
The hardest part about making a lot of money investing in AAPL is not about knowing when to buy ...... but knowing when not to sell. Most of my friends that have invested in AAPL regrets selling too early (for no other reason than they thought AAPL has peaked and they didn't want to be greedy), not that they didn't buy AAPL earlier, when it was much cheaper.
Profit warning, gross revenue warning… thank you for the correction, although that’s not the point I was making. It was sufficiently material for them to issue something to correct their guidance several weeks earlier.
The rest of your comment is interesting but, no offence, not what I was talking about and so might serve better as a stand-alone comment rather than a response to mine.
>"The notion that Apple had no idea they had a problem a mere six weeks out is laughable. It raised questions at the time."<
The thing was that share price of AAPL had already corrected itself by the time of the warning. The market had already factored in that any company with a large exposure in China, was going to be affected by the US vs China tariff war at the time. The stock markets as a whole had dropped over 12% in the Holiday quarter of 2018. AAPL was not trading where it would have been, if investors thought Apple was not going to be affected by the China tariff war. At the time of the warning, Apple was trading at about 24% below where it was when T.Cook made his comment about not seeing any problem with China.
Earning warnings are usually done if share prices are trading under the guidance of a "false market". In this case, as if Apple was not going to be affected by any downturn in China, based on T.Cook statement. Or if Apple is going to miss earnings by a significant amount. Neither of those were true at the time of the warning.
In fact, when Apple announced earnings (3 weeks after the warning), consensus was that Apple beat earnings by a penny. And AAPL jumped 7% the next day to $41.31. Over 15% above the closing price of $35.55, the day after the warning.
In hindsight, there was really no reason for Apple to warn. Even if Apple knew revenue was going to decrease below expectation weeks before the warning, Apple still beat expected earnings.
I am not taking sides in this but this statement by Apple is BS
According to Apple, Cook's comments were a statement of opinion, and therefore protected. The claim "fails to plead any actionably false or misleading statement."
anything the CEO of a company says in public is not mere “opinion” but represents the company. Especially at/on a company event/call. If this is their only “defense” then they have a pretty weak opinion of their chances.
I am not taking sides in this but this statement by Apple is BS
According to Apple, Cook's comments were a statement of opinion, and therefore protected. The claim "fails to plead any actionably false or misleading statement."
anything the CEO of a company says in public is not mere “opinion” but represents the company. Especially at/on a company event/call. If this is their only “defense” then they have a pretty weak opinion of their chances.
Even when Cook is speaking for Apple, it can still be an opinion. Anything speculative about the future will only ever be an opinion.
Wasn't there ALREADY a shareholder suit over this? Wasn't laughed out of court?
This is a consolidated case. But, yes, the judge previously dismissed all of the claims made in one of the original complaints (i.e. she dismissed claims based on a bunch of the statements which were asserted by plaintiffs to be false or misleading). What was left were claims based on two groups of statements by Mr. Cook - the so-called emerging market statements and the so-called iPhone demand statements. The judge then dismissed claims based on the latter. So all that's left at this point are claims based on Mr. Cook's so-called emerging market statements, where he said "In relation to China specifically, I would not put China in that category..."
I think this is a very weak case. It took some stretched reasoning just to get it over the rather low hurdles it needed to get over to get to this point.
ah yes! because apple is supposed to time travel into the future so their predictions are 100% correct, with no room for error.
I’m not defending the lawsuit here, but the earnings call was in November and Apple’s now famous profit warning was on January 2nd. There were already rumours of pressure in China, which Cook’s comments brushed aside.
The notion that Apple had no idea they had a problem a mere six weeks out is laughable. It raised questions at the time.
The argument isn't that Apple had no idea it had a problem. The argument is that the statements or omissions by Mr. Cook weren't false of misleading. For one thing, they were - clearly, in my view - backward looking. He didn't talk about what might happen in the near future or even what was happening at the time.
So, uh, the fund bought AAPL in July to October time frame of 2018, and then sold AAPL in December of 2018 to March 2019 for it lose money? If they held their AAPL stock or bought AAPL in that time frame, they would have a 400% gain now, in 3 years!
Can't believe anyone has any standing here, and that a judge doesn't throw out the lawsuit as there is no standing whatsoever. This fund manager made the fundamental mistake of buying high and selling low. You win some and lose some as nobody is perfect. Also can't believe fund managers can even be declared a "class".
The assertion by plaintiffs isn't that they bought shares prior to the class period (i.e. before the supposed false or misleading statements), but that they bought shares during the class period (i.e. after those statements and before the supposed corrective disclosures). So plaintiffs are claiming (1) that they bought shares between Nov. 2, 2018 and Jan. 2, 2019 and (2) that they suffered damages because of Mr. Cook's false or misleading statements or omissions.
ah yes! because apple is supposed to time travel into the future so their predictions are 100% correct, with no room for error.
I’m not defending the lawsuit here, but the earnings call was in November and Apple’s now famous profit warning was on January 2nd. There were already rumours of pressure in China, which Cook’s comments brushed aside.
The notion that Apple had no idea they had a problem a mere six weeks out is laughable. It raised questions at the time.
It was not a "profit" warning. Apple warned that (gross) revenue was going to fall about 5% below expectation. Apple never give guidance on future "profits".
As it turned out, even with the 5% shortfall on (gross) revenue, it was Apple Inc. second best quarter based on revenue and profit and a record for earning per share. For sure it would had mostly likely had been the most profitable quarter in Apple Inc. history (at the time), if it weren't for the revenue shortfall. But that is not a certainty.
As it turned out, AAPL ended up higher the day (Jan. 28, 2019) after they reported earning than it was the on the day (Jan. 2, 2019) after Apple Inc. issued the warning. And AAPL finished the year (2019) with a 98% gain. ($39.48 to $73.41) The warning wasn't even a speed bump to AAPL rising share price that year.
The hardest part about making a lot of money investing in AAPL is not about knowing when to buy ...... but knowing when not to sell. Most of my friends that have invested in AAPL regrets selling too early (for no other reason than they thought AAPL has peaked and they didn't want to be greedy), not that they didn't buy AAPL earlier, when it was much cheaper.
Apple wasn't, at the time, giving a guidance number for earnings (or profit). But it was giving guidance numbers for all of the (needed) components of earnings which allowed us to easily calculate the implied earnings guidance. For instance, based on the November 2018 guidance for revenue, gross margin, operating costs, other income, and tax rate, the implied guidance for earnings was $21.2 to $22.9 billion for Q1FY2019. Apple then revised its guidance for those metrics in early January such that the new implied guidance for earnings was $19.9 billion.
So, uh, the fund bought AAPL in July to October time frame of 2018, and then sold AAPL in December of 2018 to March 2019 for it lose money? If they held their AAPL stock or bought AAPL in that time frame, they would have a 400% gain now, in 3 years!
Can't believe anyone has any standing here, and that a judge doesn't throw out the lawsuit as there is no standing whatsoever. This fund manager made the fundamental mistake of buying high and selling low. You win some and lose some as nobody is perfect. Also can't believe fund managers can even be declared a "class".
The class is any owner or Apple stock. They owned tens of millions of dollars of Apple stock. That’s all the standing the pension fund needs. You have no idea what you are talking about and even less knowledge of the legal issues that are involved. You don’t know a single thing about managing a pension fund. You need to stick to tech and leave legal issues, financial and securities law to those who know something about them and have some relevant experience other than being an Apple fanboy.
Seriously, I get it. You’re pissed off and think it’s just another stick your hand in Apple’s wallet lawsuit. It maybe, in which case I hope it dies quickly, but you and most of the rabid fanboys commenting just don’t know too much about this other than you know you are angry.
The class is anyone who (1) bought or otherwise acquired Apple shares from Nov. 2, 2018 through Jan. 2, 2019 and (2) suffered damages because of the allegedly false or misleading statements or omissions. It isn't any owner of Apple stock.
ah yes! because apple is supposed to time travel into the future so their predictions are 100% correct, with no room for error.
I’m not defending the lawsuit here, but the earnings call was in November and Apple’s now famous profit warning was on January 2nd. There were already rumours of pressure in China, which Cook’s comments brushed aside.
The notion that Apple had no idea they had a problem a mere six weeks out is laughable. It raised questions at the time.
It was not a "profit" warning. Apple warned that (gross) revenue was going to fall about 5% below expectation. Apple never give guidance on future "profits".
As it turned out, even with the 5% shortfall on (gross) revenue, it was Apple Inc. second best quarter based on revenue and profit and a record for earning per share. For sure it would had mostly likely had been the most profitable quarter in Apple Inc. history (at the time), if it weren't for the revenue shortfall. But that is not a certainty.
As it turned out, AAPL ended up higher the day (Jan. 28, 2019) after they reported earning than it was the on the day (Jan. 2, 2019) after Apple Inc. issued the warning. And AAPL finished the year (2019) with a 98% gain. ($39.48 to $73.41) The warning wasn't even a speed bump to AAPL rising share price that year.
The hardest part about making a lot of money investing in AAPL is not about knowing when to buy ...... but knowing when not to sell. Most of my friends that have invested in AAPL regrets selling too early (for no other reason than they thought AAPL has peaked and they didn't want to be greedy), not that they didn't buy AAPL earlier, when it was much cheaper.
Profit warning, gross revenue warning… thank you for the correction, although that’s not the point I was making. It was sufficiently material for them to issue something to correct their guidance several weeks earlier.
The rest of your comment is interesting but, no offence, not what I was talking about and so might serve better as a stand-alone comment rather than a response to mine.
>"The notion that Apple had no idea they had a problem a mere six weeks out is laughable. It raised questions at the time."<
The thing was that share price of AAPL had already corrected itself by the time of the warning. The market had already factored in that any company with a large exposure in China, was going to be affected by the US vs China tariff war at the time. The stock markets as a whole had dropped over 12% in the Holiday quarter of 2018. AAPL was not trading where it would have been, if investors thought Apple was not going to be affected by the China tariff war. At the time of the warning, Apple was trading at about 24% below where it was when T.Cook made his comment about not seeing any problem with China.
Earning warnings are usually done if share prices are trading under the guidance of a "false market". In this case, as if Apple was not going to be affected by any downturn in China, based on T.Cook statement. Or if Apple is going to miss earnings by a significant amount. Neither of those were true at the time of the warning.
In fact, when Apple announced earnings (3 weeks after the warning), consensus was that Apple beat earnings by a penny. And AAPL jumped 7% the next day to $41.31. Over 15% above the closing price of $35.55, the day after the warning.
In hindsight, there was really no reason for Apple to warn. Even if Apple knew revenue was going to decrease below expectation weeks before the warning, Apple still beat expected earnings.
I think the guidance revisions were appropriate. By that point Apple new that it was going to miss its own (generally conservative) revenue and implied earnings guidance by substantial amounts.
Yes, when it reported results later in the month it beat EPS estimates by a small amount. But that's only because it had issued the revised guidance. Before that revised guidance EPS estimates were much higher as were revenue estimates.
I am not taking sides in this but this statement by Apple is BS
According to Apple, Cook's comments were a statement of opinion, and therefore protected. The claim "fails to plead any actionably false or misleading statement."
anything the CEO of a company says in public is not mere “opinion” but represents the company. Especially at/on a company event/call. If this is their only “defense” then they have a pretty weak opinion of their chances.
That isn't Apple's only defense. Apple has multiple plausible defenses (e.g. accuracy).
That said, statements made in such contexts can indeed be considered opinions for purposes of securities law. The judge in this case actually dismissed claims based on a number of statements because they were inactionable expressions of opinion.
So, uh, the fund bought AAPL in July to October time frame of 2018, and then sold AAPL in December of 2018 to March 2019 for it lose money? If they held their AAPL stock or bought AAPL in that time frame, they would have a 400% gain now, in 3 years!
Can't believe anyone has any standing here, and that a judge doesn't throw out the lawsuit as there is no standing whatsoever. This fund manager made the fundamental mistake of buying high and selling low. You win some and lose some as nobody is perfect. Also can't believe fund managers can even be declared a "class".
The assertion by plaintiffs isn't that they bought shares prior to the class period (i.e. before the supposed false or misleading statements), but that they bought shares during the class period (i.e. after those statements and before the supposed corrective disclosures). So plaintiffs are claiming (1) that they bought shares between Nov. 2, 2018 and Jan. 2, 2019 and (2) that they suffered damages because of Mr. Cook's false or misleading statements or omissions.
How did the plaintiffs suffer damages? What were these damages? Who was responsible for performing these actions to cause these damages?
So, uh, the fund bought AAPL in July to October time frame of 2018, and then sold AAPL in December of 2018 to March 2019 for it lose money? If they held their AAPL stock or bought AAPL in that time frame, they would have a 400% gain now, in 3 years!
Can't believe anyone has any standing here, and that a judge doesn't throw out the lawsuit as there is no standing whatsoever. This fund manager made the fundamental mistake of buying high and selling low. You win some and lose some as nobody is perfect. Also can't believe fund managers can even be declared a "class".
The assertion by plaintiffs isn't that they bought shares prior to the class period (i.e. before the supposed false or misleading statements), but that they bought shares during the class period (i.e. after those statements and before the supposed corrective disclosures). So plaintiffs are claiming (1) that they bought shares between Nov. 2, 2018 and Jan. 2, 2019 and (2) that they suffered damages because of Mr. Cook's false or misleading statements or omissions.
How did the plaintiffs suffer damages? What were these damages? Who was responsible for performing these actions to cause these damages?
Their theory of damages is pretty common in securities fraud cases. The calculation methods can be a bit more complicated, but at core they're based on the theory that plaintiffs' damages come from (1) paying too high a price for shares (because when they bought certain shares the share price was artificially inflated by defendants' fraud), (2) the artificial price inflation dissipating based on latter corrective disclosures, and (3) selling those shares for a loss. The plaintiffs' damages are, effectively, the lesser of (1) how much they lost on those shares and (2) how much the artificial price inflation had dissipated when they sold the shares.
Yes, of course, plaintiffs would have taken certain actions - buying and selling shares - themselves. That's generally going to be the case with allegations of fraud - securities fraud or other kinds of fraud. The reason defendants might be found liable for damages, even though plaintiffs took certain actions themselves, is that the plaintiffs' relied on the defendants' fraudulent actions when deciding to take those actions.
So, uh, the fund bought AAPL in July to October time frame of 2018, and then sold AAPL in December of 2018 to March 2019 for it lose money? If they held their AAPL stock or bought AAPL in that time frame, they would have a 400% gain now, in 3 years!
Can't believe anyone has any standing here, and that a judge doesn't throw out the lawsuit as there is no standing whatsoever. This fund manager made the fundamental mistake of buying high and selling low. You win some and lose some as nobody is perfect. Also can't believe fund managers can even be declared a "class".
The assertion by plaintiffs isn't that they bought shares prior to the class period (i.e. before the supposed false or misleading statements), but that they bought shares during the class period (i.e. after those statements and before the supposed corrective disclosures). So plaintiffs are claiming (1) that they bought shares between Nov. 2, 2018 and Jan. 2, 2019 and (2) that they suffered damages because of Mr. Cook's false or misleading statements or omissions.
How did the plaintiffs suffer damages? What were these damages? Who was responsible for performing these actions to cause these damages?
Their theory of damages is pretty common in securities fraud cases. The calculation methods can be a bit more complicated, but at core they're based on the theory that plaintiffs' damages come from (1) paying too high a price for shares (because when they bought certain shares the share price was artificially inflated by defendants' fraud), (2) the artificial price inflation dissipating based on latter corrective disclosures, and (3) selling those shares for a loss. The plaintiffs' damages are, effectively, the lesser of (1) how much they lost on those shares and (2) how much the artificial price inflation had dissipated when they sold the shares.
Yes, of course, plaintiffs would have taken certain actions - buying and selling shares - themselves. That's generally going to be the case with allegations of fraud - securities fraud or other kinds of fraud. The reason defendants might be found liable for damages, even though plaintiffs took certain actions themselves, is that the plaintiffs' relied on the defendants' fraudulent actions when deciding to take those actions.
Yup, that's the theory, and the judge should have dismissed it, just like all the other counts the plaintiffs tried to bring up.
This fund manager isn't some newbie day trader. They are responsible for people's pensions. They ultimately buy and sell stock based on a gestalt of circumstances, just like every single other stock trader in the market. People make these buy-sell decisions based a series of emotional beliefs or made-up metrics. The comments of a company's CEO is one of them, but not the whole of it. It is perhaps the least reliable thing they should use. They weren't forced to buy, and, they weren't forced to sell either.
What made them sell at a lower price? This is the very act that caused them to lose money.
Comments
The thing was that share price of AAPL had already corrected itself by the time of the warning. The market had already factored in that any company with a large exposure in China, was going to be affected by the US vs China tariff war at the time. The stock markets as a whole had dropped over 12% in the Holiday quarter of 2018. AAPL was not trading where it would have been, if investors thought Apple was not going to be affected by the China tariff war. At the time of the warning, Apple was trading at about 24% below where it was when T.Cook made his comment about not seeing any problem with China.
Earning warnings are usually done if share prices are trading under the guidance of a "false market". In this case, as if Apple was not going to be affected by any downturn in China, based on T.Cook statement. Or if Apple is going to miss earnings by a significant amount. Neither of those were true at the time of the warning.
In fact, when Apple announced earnings (3 weeks after the warning), consensus was that Apple beat earnings by a penny. And AAPL jumped 7% the next day to $41.31. Over 15% above the closing price of $35.55, the day after the warning.
https://www.cnbc.com/2019/01/29/apple-q1-2019-earnings.html
In hindsight, there was really no reason for Apple to warn. Even if Apple knew revenue was going to decrease below expectation weeks before the warning, Apple still beat expected earnings.
anything the CEO of a company says in public is not mere “opinion” but represents the company. Especially at/on a company event/call. If this is their only “defense” then they have a pretty weak opinion of their chances.
I think this is a very weak case. It took some stretched reasoning just to get it over the rather low hurdles it needed to get over to get to this point.
Yes, when it reported results later in the month it beat EPS estimates by a small amount. But that's only because it had issued the revised guidance. Before that revised guidance EPS estimates were much higher as were revenue estimates.
That said, statements made in such contexts can indeed be considered opinions for purposes of securities law. The judge in this case actually dismissed claims based on a number of statements because they were inactionable expressions of opinion.
Yes, of course, plaintiffs would have taken certain actions - buying and selling shares - themselves. That's generally going to be the case with allegations of fraud - securities fraud or other kinds of fraud. The reason defendants might be found liable for damages, even though plaintiffs took certain actions themselves, is that the plaintiffs' relied on the defendants' fraudulent actions when deciding to take those actions.
This fund manager isn't some newbie day trader. They are responsible for people's pensions. They ultimately buy and sell stock based on a gestalt of circumstances, just like every single other stock trader in the market. People make these buy-sell decisions based a series of emotional beliefs or made-up metrics. The comments of a company's CEO is one of them, but not the whole of it. It is perhaps the least reliable thing they should use. They weren't forced to buy, and, they weren't forced to sell either.
What made them sell at a lower price? This is the very act that caused them to lose money.