Tim Cook’s comments on China cost Apple a class action lawsuit

Apple may face a class action lawsuit in the United States over Tim Cook’s comments about iPhone sales in China.

Tim Cook, China, Class Action

A group of shareholders led by the Norfolk County Council of the United Kingdom succeeded in converting the lawsuit against Apple into a class action. This approach opens the file to any interested shareholder and potentially increases the risks for the company.

The comment of too many Tim Cook!

The complaint relates to a comment made by Tim Cook during the November 2018 earnings call, when the CEO claimed that Apple was noticing pressure on iPhone sales in certain markets. However, Cook added that the Chinese market does not fall into this category. In 2019, however, the company lowered its revenue forecast due to declining iPhone sales in China. For this reason, the plaintiffs believe that the revised guidance came too late and that Apple should have anticipated the problem months earlier, instead of misleading shareholders.

Judge Yvonne Gonzalez-Rogers has already advised Apple that the class action will stand because the company’s statements have distorted reality and led many shareholders to trust. In the complaint, Norfolk County Council claims to have lost nearly $1 million in AAPL stock due to this comment by Tim Cook. According to Apple, these sentences should be taken as an opinion and therefore “should not be considered a false or misleading statement that can be sued”.

The transition from a simple lawsuit to a class action will allow all shareholders to participate and request a possible reimbursement from Apple in the event of a legal victory.

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