Apple Structured Product Losses: Stock Has Closed at 52-Week Low, Damaging Noteholders

Investors have purchased approximately $1.66 billion in structured notes whose value is linked to the performance of Apple stock, and now that the stock has fallen all the way to $420 at today’s closing bell, those investors are facing the very unpleasant possibility of steep losses. As Kevin Dugan reported in Bloomberg, many of the notes, issued when Apple stock was sky-high, we so-called reverse convertibles. That’s just complicated-sounding name for a deal in which the investor buys a high-price, high-commission “structured note” linked to Apple that is issued by a big Wall Street investment bank, then if the stock craters, the investor is “put” the stock. So the investor is pitched on a low-risk way to get exposure to a very popular stock, then when things go South, the investor ends up with the beat-up stock in his or her account. The promised “downside protection” of these “Apple bonds” doesn’t work out so well in that scenario.

If you purchased structured notes or “bonds” linked to the performance of Apple and have either been “put the stock” or have suffered realized or unrealized losses, you should contact us at jake@zamansky.com or (212) 742-1414 for a free consultation to discuss your legal rights.

For our earlier discussions of Apple bonds and Apple structured products losses, please click here.