Apple is almost always embroiled in an acquisition rumour, and the latest predictions put Netflix – amongst others – in the Silicon Valley store window.
This week, we learned that Apple now has cash reserves totalling an incredible $256.8 billion – more than the GDP of most countries on earth. That’s led to rampant speculation from analysts that Apple may soon use some of this ultra-liquid cash pile for large-scale acquisitions.
According to Citigroup analyst Jim Suva, there’s a 40% chance that Apple will buy out Netflix, but he also listed six other companies that are prime targets. Below we’ll outline the companies Suva reckons may get bought out by Apple. We’ve listed the companies alongside their market capitalisation, which is the value of a single share multiplied by the number of shares issued – just one way of measuring a company’s overall worth:
1. Netflix: Founded in 1997, Netflix is now one of the world’s biggest streaming companies, serving nearly 100 million subscribers in over 190 countries. It currently has a market cap of $68.22 billion.
2. Walt Disney: Disney is one of the biggest multinational mass media and entertainment conglomerates globally, turning over $55 billion last year. It currently has a market cap of $176.37 billion.
3. Tesla: Created by PayPal co-founder Elon Musk in 2003, Tesla is now a major vendor of cars, solar panels, and energy storage devices. It currently has a market cap of $48.10 billion.
4. Activision Blizzard: Created in 2008 thanks to a merger of Vivendi and Activision, Activision Blizzard is a global video games development giant, owning major franchise like Call of Duty, World of Warcraft, and Candy Crush. It currently has a market cap of $40.76 billion.
5. Electronic Arts: Like Activision Blizzard, Electronic Arts is a major game developer, running franchises like FIFA, Madden, and Battlefield. It currently has a market cap of $29.72 billion.
6. Take Two Interactive Software: Take Two is a games developer and, although smaller than Activision and EA, operates major franchises like Grand Theft Auto and BioShock. It currently has a market cap of $6.6 billion.
7. Hulu: Like Netflix, Hulu is a subscription video service – but it only operates in the USA and Japan unfortunately. It doesn’t have a market cap because it’s owned as a joint venture by other publicly traded companies: Disney (30%), Fox (30%), Comcast (30%), and Time Warner (10%).
It’s important to remember that Apple hasn’t indicated that it wants to purchase any of these companies, and the company has been bearish about large-scale acquisitions in the past. While Suva may be on the mark here, Reuters rates his recommendations on Apple as three out of five stars.
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Do you think Apple should buy Netflix? Would it be for better or worse? And which companies do you think would be a perfect fit for an Apple buyout? Let us know in the comments.