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Apple Shares Rise 3% on Lawsuit Settlement

Story Highlights

Apple has agreed to pay a $50 million fine in response to customer complaints about its butterfly keyboards. However, the fine is not expected to have any material impact on its operations.

Technology behemoth Apple Inc. (NASDAQ: AAPL) has agreed to pay a $50 million fine in order to settle a class-action lawsuit. The lawsuit has been filed by customers facing issues regarding the company’s butterfly keyboard in its laptops.

Shares of the tech giant gained more than 3% to close at $151.80 in yesterday’s extended trade.

Butterfly Keyboards: Not Smooth for Customers

The customers of the MacBook, MacBook Air, and MacBook Pro complained that their keyboards often suffered from sticky and unresponsive keys. Further, they alleged that even small amounts of dust or debris on the keyboards would make it difficult to type.

Reportedly, certain MacBook variants from 2015 to 2019 will be covered under the settlement. Payouts could be expected to range from $300 to $395 for customers who replaced multiple keyboards, up to $125 for people who replaced one keyboard, and $50 for those who replaced a single keycap.

Though the settlement was disclosed on Monday, final approval from the presiding judge is still required. If the settlement is approved, it will be applied nationwide. However, Apple has denied all allegations made in the lawsuit, and its proposed settlement isn’t an admission of guilt or wrongdoing.

The lawsuit has been filed in the U.S. District Court of Northern California in San Jose.

Notably, the butterfly keyboard was present in previous MacBook variants. The butterfly keyboards were introduced with the aim of making MacBooks thinner but they turned out to be sensitive to dust and were prone to failure. Consequently, to get rid of the complaints, Apple introduced its new “magic” keyboard in 2020 which uses a traditional scissor mechanism.

Analysts are Optimistic About Apple Stock

Yesterday, Wedbush analyst Daniel Ives reiterated a Buy rating on the stock with a price target of $200, which implies upside potential of 32.5% from current levels.

Consensus among analysts is a Strong Buy based on 22 Buys and six Holds. The AAPL average price target of $182.12 implies upside potential of 19% from current levels. Shares have gained 5.9% over the past year.

TipRanks Website Traffic Data is Encouraging for Apple

TipRanks’ Website Traffic Tool, which uses data from SEMrush Holdings (SEMR), the world’s biggest website usage monitoring service, offers insight into Apple’s performance this quarter.

According to the tool, the Apple website recorded a 122.35% monthly rise in global visits in June, compared to the same period last year. Moreover, year-to-date, Apple website traffic increased by 99.39%, compared to the previous year. Learn how Website Traffic can help you research your favorite stocks.

The rising website traffic is an indicator of the company’s strong product demand and its brand value.

Key Takeaways

Apple’s $50 million fine payment is not expected to have any significant adverse effect on the company’s operations. This is because the company’s demand for products should continue to remain strong. Moreover, the company’s new “magic” keyboard has been a part of its laptops since 2020, unlike the butterfly variant.

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