News of a U.S. Department of Justice (DoJ) investigation targeting Apple (AAPL.US) caused the giant's stock to lose nearly 3% today and is one of the weakest 'large-caps' in the States. Wedbush Securities analysts have indicated that the company is likely to face an unprecedented case from the regulator. Media reports suggest that the DoJ may sue the company later today. It is unclear what amount the lawyers will seek.
- Wedbush analysts have indicated that while they don't expect any changes to the business model for now, they believe Apple will eventually have to find a way to settle the case.
- It is likely that the iPhone maker will have to pay a hefty fine and eventually find a compromise on the future structure of the App Store, which could take a toll on high-margin service revenues.
- Reports indicate that the Justice Department may file a lawsuit due to blocking competitors from accessing iPhone hardware and software.
- There are some concerns over EU regulations which may hit Apple, as well as Alphabet (GOOGL.US)
Apple shares (D1)
Shares of what was until recently the largest company in the U.S. are trading in a potentially bearish flag formation, which could be confirmed by a drop below $169 per share. The depreciation against the SMA200 now reaches nearly 7% and indicates weak sentiment around the Silicon Valley giant's valuation. Following reports of falling iPhone sales in China, a trip to the country was to be made by CEO Tim Cook. It is unclear how and if Apple will succeed in reversing the unfavorable dynamics, despite still very strong core business.
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Source: xStation5
