Apple Holders Can Press Lawsuit Over IPhone Demand, Court Rules

A U.S. District Court ruled that Apple holders can proceed with a suit accusing CEO Tim Cook of hiding a drop in Chinese demand for iPhones.
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A U.S. District Court ruled on Wednesday that Apple  (AAPL) - Get Report shareholders could proceed with a lawsuit accusing Chief Executive Tim Cook of hiding a drop in Chinese demand for iPhones.

The holders of the Cupertino, Calif., technology titan claimed the concealment cost them billions of dollars. 

They are led by the Norfolk County, U.K., Council, which represents the Norfolk Pension Fund.

In a November 2018 conference call, Cook said that while Apple faced sales pressure in some emerging markets, “I would not put China in that category,” Reuters reports. 

But in 2019, when Apple slashed its revenue forecast by up to $9 billion, Cook said China was a factor, thanks to the economic slowdown sparked by its trade spat with the U.S.

China reportedly accounts for about 15% of Apple’s revenue.

Morningstar analyst Abhinav Davuluri offered a mixed assessment of Apple after its earnings report last week.

“Apple reported fiscal-fourth-quarter results ahead of our expectations, led by Mac and iPad segments,” he wrote. 

“CEO Tim Cook expects iPhone revenue to grow in the December quarter, … though he did not specify the magnitude of growth. Meanwhile, all other products and services are expected to grow in the double digits.”

Davuluri raised his fair-value estimate for narrow-moat Apple to $85 from $71, “as we incorporate a stronger near-term outlook for the Mac and iPad segments due to ongoing work- and learning-from-home dynamics,” he said.

“Nonetheless, we think [the] shares are currently overvalued, as we think recent growth trends could be unsustainable as we enter 2021.”

Apple shares recently traded at $117.08, down 1.5%. They are up 60% year to date.