In recent weeks, Apple’s shares have experienced a 10% decline, a downturn that has sped up following a penalty of €1.8 billion imposed for violation of EU competition law regarding music streaming. Despite an intention to contest the fine, this process could potentially draw out over several years.
Even though a few billion euros might seem minuscule for a mammoth company like Apple, valued at $2.6 trillion (€2.37 trillion), the shares have started plunging for a reason. The fine imposed by the EU was quadruple what had been anticipated, demonstrating a tough stance towards competition law. Apple is already under scrutiny from US antitrust officials, and investors fear that this stringent enforcement may provoke similar actions from other jurisdictions.
When it comes to Apple’s heavily- guarded ecosystem, concerns have repeatedly been raised over how these constraints could hamper healthy competition. Shareholders are anxious that the EU’s decision could lead to further equivalent rulings eventually eroding Apple’s protective barriers.
Despite the drastic downturn, some investors who see opportunity amidst crisis may note that, as per Bespoke Investment’s data, Apple’s shares are at their most undervalued since the 2020’s Covid crash in March 2020. However, critics could argue that despite the current decline, the firm’s valuation still stands significantly higher than its decade-long average. At the moment, investors remain cautious, mindful of further potential plunge in the company’s shares.
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