World's 2nd Largest Stock Lost $113 Billion In 1 Day; Why US Filed Lawsuit, And Should You Buy-On-Dips?

Apple, the world's once largest company in terms of market value but now only second, lost around 113 billion dollars in 1 day. The spectrum of the money that was pulled out from Apple shares in 1 Day was almost the size of twenty-three royal Buckingham Palace, the most expensive house in the world. The reason why investors dumped Apple shares was because of a lawsuit filed by the US Justice Department.

But to investors who are looking for grabbing Apple shares, the latest fall, comes as a buy-on-dips opportunity.

Apple Shares:

On March 22, in the pre-market, Apple shares traded flat.

Overnight, Apple shares nosedived by 4.09% to $171.37 on Nasdaq. This led to its market capitalisation at $2.646 trillion, registering a decline of a whopping $112.85 billion in a single day.

The iPhone maker is now the second most valued company in the world, following Bill Gates' Microsoft which has a market cap of $3.190 trillion as of March 21.

Apple shares are moving to end this weekly in red due to the latest fall. YTD, Apple shares have dropped by nearly 7.7%, underperforming both Nasdaq and S&P 500 that gained by 8-11%.

The quantum of loss in Apple shares on March 21, is almost the entire market value of Chinese battery manufacturer and technology company, CATL, and American multinational off-price department store corporation, TJX Companies whose m-cap is around $113 billion.

Moreover, the $113 billion loss is equal to the size of 23 Buckingham Palaces. Currently, the British royal residence is valued at around $4.9 billion.

Why Did the US File A Lawsuit Against Apple?

As per the official statement by the US Department of Justice, the department joined by 16 other state and district attorneys general, filed a civil antitrust lawsuit against Apple for monopolization or attempted monopolization of smartphone markets in violation of Section 2 of the Sherman Act.

The Justice Department alleges that Apple illegally maintains a monopoly over smartphones by selectively imposing contractual restrictions on, and withholding critical access points from, developers.

Further, it alleges that Apple undermines apps, products, and services that would otherwise make users less reliant on the iPhone, promote interoperability, and lower costs for consumers and developers.

Also, the Justice Department points out that Apple exercises its monopoly power to extract more money from consumers, developers, content creators, artists, publishers, small businesses, and merchants, among others.

According, to the Department along with the 16 state and district attorneys, are seeking relief to restore competition to these vital markets on behalf of the American public.

Attorney General Merrick B. Garland said, "Consumers should not have to pay higher prices because companies violate the antitrust laws."

Garland added, "If left unchallenged, Apple will only continue to strengthen its smartphone monopoly."

The attorney emphasized that the Justice Department will vigorously enforce antitrust laws that protect consumers from higher prices and fewer choices. He said, "That is the Justice Department's legal obligation and what the American people expect and deserve."

Meanwhile, Deputy Attorney General Lisa Monaco said, "No matter how powerful, no matter how prominent, no matter how popular - no company is above the law."

The complaint alleges that Apple's anticompetitive course of conduct has taken several forms, many of which continue to evolve today, including:

1. Blocking Innovative Super Apps. Apple has disrupted the growth of apps with broad functionality that would make it easier for consumers to switch between competing smartphone platforms.

2. Suppressing Mobile Cloud Streaming Services. Apple has blocked the development of cloud-streaming apps and services that would allow consumers to enjoy high-quality video games and other cloud-based applications without having to pay for expensive smartphone hardware.

3. Excluding Cross-Platform Messaging Apps. Apple has made the quality of cross-platform messaging worse, less innovative, and less secure for users so that its customers have to keep buying iPhones.

4. Diminishing the Functionality of Non-Apple Smartwatches. Apple has limited the functionality of third-party smartwatches so that users who purchase the Apple Watch face substantial out-of-pocket costs if they do not keep buying iPhones.

5. Limiting Third-Party Digital Wallets. Apple has prevented third-party apps from offering tap-to-pay functionality, inhibiting the creation of cross-platform third-party digital wallets.

Apple Inc. is a publicly traded company incorporated in California and headquartered in Cupertino, California. In fiscal year 2023, Apple generated annual net revenues of $383 billion and net income of $97 billion. Apple's net income exceeds any other company in the Fortune 500 and the gross domestic products of more than 100 countries.

Should You Buy Apple Shares?

The latest fall in Apple shares brings in the opportunity of BUY-ON-Dips. The highest target as per the consensus of analysts is at $250, and that signals a nearly 46% potential upside. This is a long-term prospect.

As per TIP Ranks data, the 12-month average forecast in Apple shares is around Rs 204.86, indicating a potential 19.5% upside. The data added, based on 26 Wall Street analysts offering 12-month price targets for Apple in the last 3 months.

Further, the data highlighted that the average price target is $204.86 with a high forecast of $250.00 and a low forecast of $158.00. The average price target represents a 19.54% change from the last price of $171.37.

Disclaimer: The recommendations made above are by market analysts and are not advised by either the author or Greynium Information Technologies. The author, the brokerage firm nor Greynium would be liable for any losses caused as a result of decisions based on this write-up. Goodreturns.in advises users to consult with certified experts before making any investment decision.