Apple could be preparing to buy Netflix, say Citi analysts

Tomas Mccoy
January 3, 2018

The cut in corporate taxes and one-time allowance for companies to repatriate cash stored overseas without a major tax hit will give Apple, which has about $252 billion in cash at mostly foreign jurisdictions, a way to bring money back to the United States and make acquisitions. If a 30 percent premium is added, it could well be a purchase of almost $108 billion, much higher than the $3 billion Apple spent to purchase Beats Audio - its largest acquisition so far - in 2004.

Analysts with investment banking monolith Citi are predicting there's a decent chance that Apple will do exactly that.

On the other hand, Apple may benefit highly from buying Netflix as a result of President Trump's tax policy created to bring overseas corporate money back to the US. The analysts say that a Disney deal would have a larger impact on Apple's stock price (20%) than a Netflix acquisition would have (6%). And Apple's method of content delivery - while robust and market-defining within the iPhone and Mac ecosystems - doesn't align with the way viewers are now streaming Netflix and its competitors.

One of the hottest news of the day was Citi analysts predicting that there is a 40% chance that Apple will acquire Netflix.

Last month, President Trump signed a new law that gives corporations a one-time allowance to repatriate cash stored overseas without taking a major tax hit. 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. Let us know below. Now, making iPhones and television series are two different things, which further strengthens Apple's owning of Netflix.

Apple (NASDAQ: AAPL) has been struggling from many years to offer compelling video contents to viewers.

In September 2017, reports poured in that Apple might lease the Culver Studios in California as it plans to pour $1 billion (roughly Rs. 63,000 crores) into TV and movie productions. For perspective, Disney's buy-up with Fox was worth $52.4 billion. And Netflix has found that it can get subscribers to pay it for original shows.

How excited are you to have come across the possible future acquisition? The company is also working on its first scripted series with Jennifer Aniston and Reese Witherspoon.

Other reports by VideoGamingPros

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