Expert Financial Analysts Predict There Is A Very Good Chance Apple Will Buy Netflix
Citigroup analysts recently sent a notice to their investors with predictions about what companies Apple, who is suddenly flush with cash, might be looking to purchase in the near future. One of those companies Citi analysts Jim Suva and Asiya Merchant rated the most likely to be purchased by Apple is Netflix, which would solve Apple’s issues with creating their own successful streaming service.
According to Suva and Merchant, as reported by Business Insider, there is a 40 percent chance Apple will purchase Netflix, a 20 to 30 percent chance Apple buys The Walt Disney Co. (this was pre-Fox, however), a 10 percent chance they purchase video game makers Activision Blizzard, Electronic Arts or Take-Two Interactive Software, and a 5 percent chance Apple purchases Tesla.
Thanks to President Trump’s corporate tax cut recently being passed, Apple now has access to around $250 billion in overseas cash that it previously could not bring back into the United States.
Netflix is currently valued at $85 billion, and the biggest acquisition Apple has made so far is the $3 billion it spent to purchase Beats Electronics in 2014 so dropping $75 billion on Netflix would be a major leap.
That being said…
“The firm has too much cash – nearly $250 billion – growing at $50 billion a year. This is a good problem to have,” Suva and Merchant told clients. “Historically, Apple has avoided repatriating cash to the US 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.”