The Newest Risk for Apple Users & Shareholders
2013 has been a rough year for Apple (AAPL). Shares of the iPhone and iPad maker have fallen 36% from their record high of $700 a share in September (the stock has rebounded to $449 a share from its recent low of $400). The Cupertino, Calif.-based company has been derided for a lack of awe-inspiring new products and CEO Tim Cook, who took over in 2011, has been deeply criticized for his management of the tech behemoth and was forced to defend Apple’s offshore tax loopholes at a Congressional hearing last month. Some are even calling for Cook’s head. Now, two litigation suits involving Apple could put additional pressure on the stock. Apple “knowingly participated in and facilitated a conspiracy to raise prices of E-books” according to U.S. District Judge Denise Cote, the judge overseeing the government’s lawsuit against Apple. And the United States International Trade Commission said on Tuesday that Apple had violated a patent owned by competitor Samsung. (Last September the trade commission handed Apple two U.S. legal victories against Samsung over patented technology in the iPhone and iPad).
The ruling potentially means that Apple’s third- and fourth-generation iPhone devices and the first-, second- and third-generation iPads that run on AT&T’s cellular network can no longer be sold to U.S. consumers. The iPhone 5 and the fourth-generation of the iPad were unaffected by the trade commission’s decision. An appeal from Apple is expected. President Obama has 60 days to review the order and can veto it, reports The New York Times.
“We are disappointed that the commission has overturned an earlier ruling and we plan to appeal,” said Apple Spokesman Steve Dowling. “Today’s decision has no impact on the availability of Apple products in the United States.”
The ban on Apple products could have serious implications for the company but these lawsuits are not unexpected, explains Yahoo! Finance Senior Columnist Michael Santoli.
“We have these intertwined innovations…and when you’re the big dog like Apple people are going to run at you,” Santoli says in the attached clip.
Moreover, Wall Street analysts may have discounted or ignored the effect that Apple's litigation problems could have on the stock, argues The Daily Ticker’s Aaron Task.
“I’m not aware of any analyst on Wall Street who said litigation risk is something you should be concerned about if you own Apple,” he says.
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