It’s Tim Cook’s comments that cost Apple dearly: $490 million. This is the amount agreed to by Apple and the plaintiffs in the class action filed last June.
The legal action initiated by the British Pension Fund is dated November 1, 2018. In a question-and-answer session with analysts following the release of Apple’s financial results, Tim Cook commented on the difficult situation in some emerging countries.
Apple has increased sales pressure there, especially in Turkey, India, Brazil and Russia group. These countries faced devaluation of their currencies which made Apple’s business unable to do so. Tim Cook, who was also asked about China, revealed that he had not considered this market. falls into this category. He points out that the last quarter in China was very solid with double-digit growth.
Change in tone after two months. On January 2, Apple published a letter to investors in which Tim Cook warned about the results to be announced at the end of the month. With China no longer so prosperous, Apple admitted it lacked flair and did not anticipate the magnitude of the decline in demand in what is its second-largest market behind the United States. China is also single-handedly responsible for the shock seen in the upcoming results.
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It’s a Scottish shower for investors. In its complaint, where Tim Cook is accused of defrauding shareholders, English fund Norfolk Pension Fund notes that Apple’s market capitalization fell by $74 billion that day.
Apple tried to dismiss the complaint by arguing that Tim Cook was not commenting on the future situation in China when he praised Apple’s performance in the country during the previous quarter.
Judge Yvonne Gonzalez Rogers did not have the same interpretation. She believed that jurors could consider that the criticism of Apple bosses also describes a forecast trend for sales, not just an analysis of the past. Still, according to the judge, Apple was aware of the deterioration of China’s economy — we were in the middle of a trade war with the United States — and of statistics describing declining demand among consumers. Apple’s motion to dismiss the case was denied.
Apple chose to settle the reports Reuters, and close this file with the contract instead of continuing this process. The amount set for the settlement will be allocated to investors who bought Apple shares between Tim Cook’s November comments and his January letter.
Tim Cook
