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Apple’s success in China is essential to the company’s long-term growth. AAPL is highly regarded as the most important stock in the US.

It is currently being held by a whopping 181 hedge funds.

While the tech giant does a large bulk of its business in China (the group’s second largest iPhone market), majority of its investors come from other parts of the world. Because of these circumstances, many firms that are heavily invested in Apple are getting worried. China’s drive has slowed down considerably, resulting in waves of uncertainty that resonates from the Asian hub’s own financial markets to the rest of the global economy.

This put tremendous pressure on Tim Cook, Apple’s chief executive. So he did what any leader of a dominating tech brand would do- send an email to financial guru and star of Mad Money, Jim Cramer.

The message reads:


Cook’s email helped the company avoid serious losses. After the message was released, AAPL shares bounced back confidently, recouping around $64 billion in market cap. At its lowest point, trades were going for $92 per share. There were many other factors that contributed to the much-needed boost. But it is also worth noting that Cook was the only CEO who came forward with an unofficial mid-quarter report during the meltdown.

Did the Apple CEO Violate SEC Rules?

Based on the context of the message, the email could be flagged as reaffirmation of current projections. Some could interpret it as financial guidance, as it was likely that Cook expected the CNBC television host to share the content to viewers.

“I certainly could see, in some circumstances, where the SEC would want to review the conduct and think it is a violation of Reg FD,” said Bill Singer, lawyer and owner of the website. “It constitutes a disclosure giving certain individuals the benefit before it was percolated by the rest of the public, during a fast-moving, extraordinary market.”


Stock Market Woes Point at Correction, Not Recession

Cook might have jumped the gun a bit too early with his e-letter to Cramer. In the past four years, the market has steadily increased, surging as high as 200 percent. The recent drop only made up around 13 percent of that figure, leaving those who are riding on value investing strategies in the profitable green area. But for day or swing traders, sudden shifts in the market are very bad- though technically it is still possible to profit from such fluctuations.

The emotional sell off that took place was timely and inevitable. Analysts predicted that a correction was coming due to unusually high valuations, especially in the tech industry.

Unfortunately, China’s economy, which is steering the downward trend, can’t be fixed overnight. But based on similar events (history will prevail and repeat itself), markets will eventually rebound from the shifts and losses.

“Arguably, the stock market was overvalued, so the correction was overdue. But the slide has cracked confidence and it takes time to reassemble this picture,” clarified Brad McMillan, chief investment officer at Commonwealth Financial Network.

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