Analysts: Apple could buy Netflix
Could Apple be eyeing a monumental buyout of Netflix? There’s a 40 percent chance it could happen according to Citi analysts Jim Suva and Asiya Merchant.
The duo believes the possibility has risen largely due to President Trump’s corporate tax cut.
As reported by Business Insider, Suva and Merchant told clients, “[Apple] has too much cash—nearly $250 billion—growing at $50 billion a year. This is a good problem to have.
“Historically, Apple has avoided repatriating cash to the U.S. to avoid high taxation. As such, tax reform may allow Apple to put this cash to use. With over 90% of its cash sitting overseas, a one-time 10% repatriation tax would give Apple $220 billion for M&A or buybacks.”
Suva and Merchant pointed out that Apple could acquire Netflix for only one-third of that amount.
The interesting aspect of the speculation centers around Netflix’s announcement in October that they will devote $8 billion to original programming in 2018. This perhaps makes the company more attractive to Apple, which has begun dabbling with original content to supplement the movie and TV show purchases and rentals traditionally available through iTunes.
The company bought the worldwide rights to Carpool Karaoke in 2016, and have adapted the series for Apple Music subscribers. In addition, they’ve announced the production of a scripted series set in the world of a network morning show and a revival of anthology Steven Spielberg’s ’80s anthology series: Amazing Stories.
The purchase would tightly integrate the Netflix platform with Apple TV—much like with Amazon Prime and Amazon’s Fire digital media players—but it’s little more than speculation at this point. Suva and Merchant also offer up Disney (25 percent possibility), Tesla (5 percent) and gaming companies Activision, Electronic Arts and Take-Two Interactive (all 10 percent) as potential spending targets for Apple’s corporate tax break.
Read [Business Insider]
About the Author
Kirk Hiner Kirk has been writing for the Apple web since 1997, having served as editor of Applelinks and the Technology Tell Apple Channel. He is also currently editor-in-chief of Public Access Gaming. Kirk lives with his wife and three children in small-town Ohio where the land is cheap and the air is (relatively) clean.
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Been saying this forever. Apple needs a way to have movie/tv subscription model. Creating a new platform is going to be expensive.
While the analysts might know more than me, it makes no sense for Apple to be hiring experts from its competition like Amazon and sign up three productions in the last few months if they’re going to turn around and buy Netflix.