Following Apple’s revision to its Q1 2019 earnings guidance earlier today, the company is being investigated by Bernstein Liebhard LLP, a “nationally acclaimed investor rights law firm” for potential securities fraud. The firm alleges that Apple executives made misleading comments about the company’s performance in China.
Bernstein Liebhard says that it is investigating potential securities fraud claims “on behalf of shareholders of Apple.” The alleged fraud results from “allegations that Apple and/or its executives may have issued materially misleading business information to the investing public”
Specifically, the firm points to the stark difference in comments made by Tim Cook his letter to Apple investors today compared to what he said on Apple’s Q4 2018 earnings call in November. In the letter today, Cook said that over 100 percent of its revenue decline occurred in China:
While we anticipated some challenges in key emerging markets, we did not foresee the magnitude of the economic deceleration, particularly in Greater China. In fact, most of our revenue shortfall to our guidance, and over 100 percent of our year-over-year worldwide revenue decline, occurred in Greater China across iPhone, Mac and iPad.
Meanwhile, in November 2018, Cook touted Apple’s business in China as “very strong” during the fourth quarter of 2018:
“Our business in China was very strong last quarter. We grew 16%, which we’re very happy with. iPhone in particular was very strong, very strong double-digit growth there.”
The result of these different statements, Bernstein Liebhard notes, is that Apple’s stock fell by over 7.5 percent during after-hours trading today – which “damaged investors.” Whether or not this investigation results in anything of substance remains to be seen. You can read more – and join the class action investigation – on the Bernstein Liebhard website right here.
- Tim Cook says $29 iPhone battery program partly to blame for weak Q1 iPhone sales [Video]
- AAPL issues rare revision to earnings guidance, lowering expectations due to ‘fewer iPhone upgrades’ & China struggles
- Apple to announce holiday earnings results on January 29, after cutting revenue guidance
FTC: We use income earning auto affiliate links. More.