Finimize - ✋ Apple got sued

What’s going on here?

Apple was sued on Thursday, by US regulators on a mission to rid the market of monopolies.

What does this mean?

Apple has a legion of loyal fans, primed to pledge their iPhone allegiance whenever a friend suggests the faux-pas of – gasp – trying another brand. The US Department of Justice (DoJ) has voiced its suspicions about the tactics Apple used to get there, though. Apple is being accused of gatekeeping its own services and icing out messaging apps that promote the mingling of iPhone users and anyone that dare prefer the touch of a competitor’s screen. If the DoJ proves that Apple is making the market tougher for rivals and consumers, the company could be forced to break up or shake up its business. That’s a tangible threat for Apple’s 64% market share – not what the stock needs after falling 7% this year while the S&P 500 climbed 10%.

Why should I care?

Zooming out: It’s getting toasty in here.

Apple’s derrière is used to the hot seat. European Union regulators slapped the company with a $2 billion fine for policies that force music streaming companies to take payments through the App Store. On top of that, Apple’s being assessed against the rules of Europe’s Digital Markets Act, and a dicey outcome could add up to fines worth 10% of its annual revenue.

The bigger picture: Big losses, little wins.

That pile-up of legal threats isn’t going to appease Apple’s investors. They’ve been watching through clammy fingers while iPhone sales lag behind local rivals in China and electric vehicle plans are trashed. After all that, Apple has lost its spot in the Fab Five ranking, trailing behind Nvidia, Microsoft, Meta, Alphabet, and Amazon. The only silver lining for iPhone fans: any forced changes could mean more App Store freedom, a wider choice of browsers, and better support for third-party smartwatches and contactless payments.

What’s going on here?

Reddit pulled off the biggest initial public offering (IPO) from a social media company in years.

What does this mean?

Reddit’s most intriguing messaging forums might be known for hiding in hard-to-find corners of the site, but the platform’s IPO was anything but under-the-radar. After listing on Thursday, Reddit’s stock flew from the IPO price of $34 to just over $50. That valued the platform – which harbors some 73 million daily users – at around $9.5 billion. Redditors, the platform’s loyal users and moderators, were allowed to buy into the company alongside institutions, too – a rare opportunity that’s left them sitting on a profit worth messaging about.

Why should I care?

Zooming in: Sense check tech.

After a long dry spell, Reddit’s debut suggests that the US IPO market is finally back in business. And it was in good company: Astera Labs’ stock picked up by 70% after the tech company went public on Wednesday. Be wary of chasing their tails, though. Historically, newly public stocks lose their momentum as the hype fades, a trend that seemed to be impacting Reddit’s stock on Friday. Plus, Reddit has yet to turn a profit. That said, the platform did launch a data-licensing business last year and signed a deal with Google in February, promising to hand over data to help train Alphabet's AI systems.

The bigger picture: Misinformation on Reddit… Never.

Reddit might be a hot stock right now, but our latest Modern Investor Pulse showed that retail investors have become more cautious about using social media to find investment ideas. Instead, they’re leaning toward more credible, independent sources for advice. They’re not feeling as skeptical about markets, mind you: 74% of those who answered said they think global stock markets will be higher a year from now, and 71% plan to make more investments this year, with tech stocks at the top of their shopping lists.