Cooked: Apple shares spiral as investors launch 'securities fraud' lawsuit

Dwayne Harmon
January 5, 2019

Chinese investors have been among the most pessimistic about their economy's prospects: China's stock market lost $2.3 trillion, or about a quarter of its value, in 2018 - its worst performance in a decade. Its stock fell 9 percent in early trading Thursday.

Business Insider reports that the NY law firm Bernstein Liebhard has begun to attempt to gather support from Apple investors for a class-action lawsuit against the tech giant over their failure to warn investors about the lack of iPhone demand. "Build those plants in the United States.'.China is the biggest beneficiary of Apple, more than us, because they build their product mostly in China".

China-based smartphone maker Huawei - a company that could be on track to surpass Apple in terms of overall smartphone unit shipments in 2019 - is gaining traction with its high-end P-series and Mate-series devices.

Cook blamed a number of issues, including lackluster iPhone sales, but also pointed to Trump's trade war with China.

Wall Street analysts scrambled to cut their price targets on Apple, with at least 27 lowering their estimates. Cook's update on Wednesday revealed that guidance has now plummeted to $84 billion in revenue for the quarter.

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Apple said that it expects weak iPhone sales in other emerging markets, driving down revenue despite some positive signs in developed markets and in its other products and services. Universal Display Corp. declined 3.5 per cent and Lumentum Holdings Inc. tumbled 8.7 per cent. Shares of US retailers that sell Apple products were also weak on the news.

Investors were also unsettled by a report Thursday that showed signs of weakness in US manufacturing.

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Apple took its biggest loss in six years Thursday and ended at $142.19.

"It's two-third what's happening in China and one-third Apple's pricing", said Gene Munster, managing partner at Loup Ventures, noting the weighted average iPhone price had jumped 23% with the release of the new models.

Months after Starbucks announced a massive China expansion this year, it said that China sales would increase just 1 percent, far below those in the United States.

'Typically my needs for my phone are high speeds for downloading videos or transferring files from chat apps. "I am very bullish on the country and the people and our ability to do well there", he said during the company's most recent earnings call in November.

Qualcomm Inc QCOM.O said it had posted security bonds to enforce a court order banning sale of some iPhone models in Germany, meaning Apple would likely have to pull iPhone 7 and 8 models from its 15 stores in the country.

"Futures immediately sold off. Apple is a 4 per cent position in the market and considered a bellwether and comments were that the US was fine, China was slower than expected".

"I think there are a heck of a lot of U.S. companies that have a lot of sales in China that are basically going to be watching their earnings be downgraded next year until we get a deal with China".

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