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Apple achieves $490 million deal over CEO Cook's China sales remarks

People gaze at the new iPhone 15 Pro as Apple's new iPhone 15 officially goes on sale throughout China at an Apple shop in Shanghai, China September 22, 2023

March 15 (mod1s) - Apple (AAPL.O), opens new tab agreed to pay $490 million to resolve a class-action complaint that asserted Chief Executive Tim Cook deceived shareholders by hiding dwindling demand for iPhones in China. 

A preliminary settlement was filed on Friday with the U.S. District Court in Oakland, California, and needs approval by U.S. District Judge Yvonne Gonzalez Rogers. 

It originated from Apple's surprising statement on Jan. 2, 2019 that the iPhone manufacturer would lower its quarterly sales prediction by much to $9 billion, citing U.S.-China trade tensions.

Cook previously told investors on a Nov. 1, 2018, analyst call that while Apple faced sales pressure in nations like as Brazil, India, Russia and Turkey, where currencies have dropped, "I would not put China in that category." 

Apple warned suppliers a few days later to limit output. 

The decreased sales prediction was Apple's first since the iPhone's introduction in 2007. Shares of Apple plummeted 10% the following day, wiping off $74 billion of market value.

Apple and its attorneys did not immediately reply to demands for comment on the verdict. 

The Cupertino, California-based corporation disputed culpability, but settled to avoid the expense and distraction of litigation, court filings indicate. 

Shawn Williams, a lawyer at Robbins Geller Rudman & Dowd representing the stockholders, termed the settlement a "outstanding result" for the class. 

The compensation includes investors who acquired Apple shares in the two months between Cook's statements and the sales prediction.

Apple generated $97 billion of net profits in its previous fiscal year, and the dividend equaled a little under two days of earnings. 

Last June, Rogers refused to dismiss the claim. 

She considered it likely to suppose Cook had been addressing Apple's sales projections and not currency swings, and said Apple recognized China's economy was deteriorating and demand may decline. 

The principal plaintiff is the Norfolk County Council as Administering Authority of the Norfolk Pension Fund, situated in Norwich, England.

Lawyers for the shareholders may demand costs of up to 25% of the settlement sum. 

Apple's share price has more than doubled since January 2019, giving the corporation a more than $2.6 trillion market worth. 

The case is In re Apple Inc Securities Litigation, U.S. District Court, Northern District of California, No. 19-02033.


Source: https://www.reuters.com/

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