Shares in Apple fell slightly in New York as investors largely shrugged off a European Commission ruling that the company must pay up to €13 billion in unpaid taxes, plus interest, to Ireland.
On Tuesday, Apple shares were down 0.7 per cent at $106.09 on the Nasdaq exchange by the time trading closed for the day in Europe, giving the group a market value of $571.4 billion (€510.7 billion).
Investors in the California-based group are likely to be "unconcerned on a relative basis" about the news, as the penalty, while large in absolute terms, "represents a small portion of Apple's overall valuation", said Gene Munster, an analyst with US investment bank Piper Jaffray.
Apple and the Irish Government have strongly rejected the commission's findings that the iPhone maker secured selective tax advantages in this country under agreements with the Revenue Commissioners in 1991 and 2007. Both said on Tuesday they would appeal the ruling through the European Court of Justice.
Free cash flow
"Given Apple's cash pile of over $230 billion dollars, and the more than $53 billion in free cash flow expected this year, the company can easily afford to pay any potential bill," Dublin-based Cantor Fitzgerald analyst David Donnelly said before the tax bill figure was unveiled by the EU on Tuesday.
“Long term, we remain positive on the stock given its highly cash-generative nature and its potential for acquisitions to bolster its services range, which we see as necessary given declining iPhone sales, on which Apple is reliant,” Mr Donnelly said.
Mr Donnelly said Apple’s launch next week of its iPhone 7 is unlikely to amount to much by way of “game-changing” technology in a way that would dramatically improve phone sales.