Investors launch class action against Apple over ‘concealed’ iPhone demand slump
Apple has been accused of securities fraud for allegedly concealing a slump in iPhone demand, which sparked a $74bn (£57bn) slide in the tech giant’s market value.
Investors that bought Apple stock in the two months before chief executive Tim Cook reduced the company’s quarterly revenue forecast by as much as $9bn in January have filed a lawsuit against the firm.
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The company blamed the cut to revenue forecast, which was the first time the firm had reduced its estimates since the iPhone’s launch in 2007, in part on the intensifying US trade war with China.
Apple’s share price fell 10 per cent the following day, leaving the company’s market value around 40 per cent below its $1.1 trillion peak three months earlier.
Cook and chief financial officer Luca Maestri have been named as defendants in the proposed class action.
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The complaint, which was filed in California by the City of Roseville Employees’ Retirement System, said iPhone demand had fallen because of tensions between the US and China, and a growing preference among customers to replace batteries in old phones.
However, this was not disclosed when it should have been, the filing said.