Apple Agrees to a $490 Million Settlement Over Claims of Misleading Investors Regarding iPhone Sales in China

Apple Music’s student plan is getting more costly

Apple Agrees to a $490 Million Settlement Over Claims of Misleading Investors Regarding iPhone Sales in China

Apple has consented to a $490 million settlement to resolve a class-action lawsuit accusing CEO Tim Cook of misleading investors regarding a significant downturn in iPhone sales in China, leading to an unexpected adjustment in the company’s revenue outlook.

This preliminary agreement, documented on Friday in a federal court in Oakland, California, addresses a lawsuit by shareholders concerning Apple’s communication about the sales performance of iPhones launched in September 2018, particularly in China, a key market for the company.

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According to the lawsuit, Cook indicated in an early November 2018 investor call that the new iPhone models had a strong start.

However, this optimism was short-lived as, on January 2, 2019, Cook announced that Apple’s revenue for the recently concluded quarter would be $9 billion less than previously forecasted by the management. This shortfall was primarily attributed to poor demand in China.

This was a historic moment for Apple, marking its first revenue guidance reduction since the iPhone’s debut in 2007, which resulted in a 10% drop in stock price the following day, erasing over $70 billion in shareholder value.

Despite fiercely contesting allegations that Cook had given investors a misleading picture of iPhone sales in China from early November to early January, Apple, based in Cupertino, California, chose to settle. The company stated in settlement filings that this decision was made to avoid the continuing extensive, costly, and disruptive legal battle.

The settlement emerged through mediation after U.S. District Judge Yvonne Gonzalez Rogers declined Apple’s dismissal request and scheduled a trial for September 9.

Judge Gonzalez Rogers is expected to review the settlement for approval in a hearing set for April 30.

Eligible shareholders who purchased Apple stock towards the end of 2018 stand to receive a share of the settlement fund, which will amount to less than $490 million after deducting legal fees. The lawyers are expected to request approximately $122 million, or a quarter of the settlement amount.

Despite the settlement representing a fraction of Apple’s $97 billion profit in the fiscal year ending September, shareholders who retained their stocks have seen an increase in wealth. Following Cook’s announcement regarding China, Apple’s stock value has more than quadrupled, adding an additional $2 trillion in shareholder wealth.

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Pooja Chauhan

Pooja Chauhan: Your Source for Entertainment and Box Office News Pooja Chauhan is a passionate writer and dedicated journalist specializing in delivering the latest updates and insights from the world of entertainment and box office. With a keen eye for detail and a deep love for cinema, Pooja brings her readers accurate and engaging coverage of all things related to movies, celebrities, and the dynamic world of showbiz. Her commitment to keeping her audience well-informed and entertained makes her a valuable voice in the realm of entertainment journalism. When she's not busy uncovering the latest scoops, Pooja enjoys exploring classic films and indulging in creative writing." Contact us: admin@bollywoodfever.co.in

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