Comments by Apple CEO Tim Cook at the center of a class action lawsuit against Apple
Wall Street doesn’t like surprises and as far as Apple analysts are concerned, that was a big deal. In fact, it was the first time Apple had cut its revenue forecast since the unveiling of the iPhone OG in January 2007. According to Reuters, this week US District Judge Yvonne Gonzalez Rogers, the same judge presiding over the battle court between Apple and Epic Games, ruled that a British pension fund could sue Apple in a class action lawsuit during a conference call organized by Apple in November. 2, 2018. While CEO Tim Cook said at this press event that Apple is facing commercial pressure in some emerging markets, Apple’s chief executive said, “I would not put China in this category ”. But a few days later, Cook told Apple’s suppliers to cut production due to lower demand from China; on Jan. 2, the company cut its quarterly revenue forecast by $ 9 billion. The next day, Apple shares plunged 10%, wiping out $ 74 billion in the stock’s market value.
Apple faces trial over comments made by Tim Cook in 2018
In her 23-page ruling released Wednesday, Judge Rogers said Apple shareholders alleged that Cook’s statement that Apple was feeling “sales pressure” in some emerging markets (but not China) was “false. and misleading ”. She added that it seemed incredible for Cook not to see the “worrying signs” in China that the company itself had spotted. The judge added that it “tested credulity” to believe that Cook was unaware of the trade tensions between the United States and China and their impact on Apple. Rogers also said the plaintiffs came to the conclusion that Cook knew there were risks to China when he spoke during the analysts call. And according to the judge, the plaintiffs came to the conclusion “that Cook did not act innocently or by simple negligence”. Judge Rogers also dismissed claims related to the demand for 2018 Apple phones such as the iPhone XS and iPhone XS Max.
The plaintiffs are headed by Norfolk County Council as the administrative authority of the Norfolk Pension Fund, located in Norwich, England. The lawsuit is filed in US District Court, Northern District of California. Apple and its legal team will have to try to create doubt as to whether Cook should have known what was going on with the Chinese economy and how that would affect the business. Investors who handle large sums of money, like the plaintiff, would take Cook’s comments as a sign that Apple was not facing any problems with its business in the country. If you were part of the jury that tried the case, would you believe that the CEO of one of the most powerful technology companies in the world had no idea of the economic conditions in one of the most important countries where the business operates? It’s far from certain, which means that unless Apple is convinced it can win, it may be up to the tech giant to take a seat. Of course, we are not lawyers and we do not play it on TV.