They say you'll experience the new year the way you usher it in. Well, for some, this widely held belief can be quite a harsh reality. Apple's entry into 2024 has witnessed a significant development that has taken an unexpected negative turn. The tech giant has found itself in a challenging situation within just four trading days, prompting investors to adopt a defensive stance as the situation may deteriorate further.
Amidst brewing troubles, Apple shares have dropped by 6% from its 2023 closing price of $192.50 per share.
What’s worse is that it is starting the year with the first four trading sessions in red for the first time since 1982.
This decline comes in the wake of the report by The New York Times suggesting that the Justice Department is nearing the filing of an antitrust case against Apple. According to it, the Justice Department “is in the late stages” of investigating the tech company. Specifically, Apple could be dragged into a “sweeping antitrust case” in the first half of the year for alleged anticompetitive actions aimed at maintaining the dominance of the iPhone.
This potential legal battle adds to the growing challenges facing Apple, ranging from declining iPhone sales to patent disputes over its innovative Watch. In October, the International Trade Commission (ITC) found Apple guilty of infringing on a patent held by blood pulse oximeter maker Masimo.
The California-based company has been the most valuable publicly-listed company since July 2022, but it has witnessed a reduction of approximately $200 billion in market value so far this year. This suggests that Apple is rapidly losing its status as the world's most expensive corporation. Simultaneously, Microsoft is now inching closer to claiming the title of the most valuable U.S. company, a position it hasn't held since late 2021. The difference in market value now stands at less than $100 billion between the two tech giants. The losses have pushed Apple's market value down to about $2.8 trillion, nearing Microsoft's $2.7 trillion.
However, despite the precarious start, it's important not to dismiss Apple prematurely. As history has shown, a rocky start doesn't necessarily determine the final outcome. In 1982, Apple faced a similar challenging start but ended the year with a 35% increase in its stock value.
