Apple Settles Class Action Lawsuit for $490 Million
Apple has reached a settlement in a class action lawsuit, agreeing to pay $490 million. The lawsuit alleged that Apple CEO Tim Cook made a misleading statement about iPhone sales in China back in 2018. This incident resulted in a one-day decline of 10% in the stock market.
During an investor conference call in November 2018, Cook mentioned that sales of the latest iPhone models in China were off to a good start. However, the reality was quite different. In January 2019, Apple revealed that revenue was going to be $9 billion lower than expected for the fiscal quarter, with most of the shortfall coming from China.
This marked the first time since 2007 that Apple had to lower its revenue guidance, causing displeasure among investors and leading to a significant drop in share value. The decline amounted to $70 billion being wiped off from Apple stockholders.
After more than four years of fighting the allegations, Apple decided to settle the case as it grew weary. Pressure mounted on Apple to settle after U.S. District Judge Yvonne Gonzalez Rogers, who presided over the Epic v. Apple case, set a trial date for September 9th.
A hearing on April 30 will be held by Judge Gonzalez Rogers to discuss and potentially approve the settlement. Investors who purchased Apple stock in late 2018 may be eligible to receive part of the $490 million settlement, after attorneys take their fees amounting to about 25% of the total settlement figure.
Despite the setback caused by Cook’s initial statement, Apple’s stock has since quadrupled, adding $2 trillion to investors’ portfolios.
