With a securities industry crown that is , as of this writing , hovering around$800 billionand more than$250 billion in immediate payment , Apple is fucking loaded . Not even its emphatically 2-dimensional net report last workweek can change the fact that it is themost valuable publically traded companyof all time .
With all that cash , and with that huge food market cap , plenty of investor and psychoanalyst are busy woolgather up ways for Apple to spend that money . For years , they have pontificate that if Apple wants to keep on to grow , it need to make the form of major unification and acquisitions that many of its contemporaries — including Google , Microsoft , Facebook — have made , and that means invest billion . imagine Facebook’s$19 billion acquisitionof WhatsApp , or Microsoft’s$26 billion acquisitionof LinkedIn , or even AT&T’sproposed $ 80 billion purchaseof Time Warner .
Every few months , as Apple ’s stock price continue to rise and its hard currency coffers get more and more full , these calls for action craw back up . Just last week , Citigrouplisted seven companiesit call up Apple should eyeball for takeover bids , including common favorites like Netflix , Tesla , and Disney . For estimable cadence , Citi threw in some other new takeover targets , let in Activision Blizzard , Take Two Interactive , Electronic Arts , and Hulu . block that most of these companies do n’t make a lick of sense for Apple to acquire ( Activision Blizzard , EA , Take Two Interactive ) , and draw a blank that many are categorically not for sale ( Tesla , Netflix ) , investors are overly sharpen on Apple spending money .
“ Apple take to bribe ‘ XTC ’ ” rhetoric has reached such fervour , I really get a delivery in my inbox about a gaming servicing that ’s taking bets about what company is the betting odds - on favorite for a major attainment by Apple . draw a blank that that ’s not how M&A solve , forget that Apple ’s approach to acquisition is very conservative compared not just to other tech troupe , but any caller of its size , the fact that shady wager parlors are now taking legal action on what major deals Apple is go to make turn out that the world is insane . What makes this even funnier is that when Apple made its biggest attainment in its 40 year account for Beats back in 2014 , it was only$3 billion ; the takeover point investor and pundits are pushing Apple to make would all be plenty ten or twenty times with child .
Historically , Apple is known for make small , more strategical investments . Aside from the Beats acquisition , the company ’s only with child spend in recent twelvemonth was a$1 billion investmentin Didi Chuxing ( the Uber of China that in reality forced Uber out of China ) , and that seemed to be as much about getting a good horse sense of the Formosan market and potentially making a overnice lucre , as anything else . The two most of import investment funds Apple has ever made , NeXT ( which brought back Steve Jobs and gave Apple the o that would be the underpinnings for its future product , including the iPhone ) , and PA Semi ( which admit Apple to design its own peregrine C.P.U. and chipsets ) , were comparatively small at under $ 500 million a piece .
Apple is not a ship’s company that realise massive acquisitions , and as its financials continue to prove , it does n’t demand to be . And yet , every few month , clause abound about how Apple should spend its money , always with a focal point on bragging flamboyant deals .
Over the last six monthsForbes , Fortune , Seeking Alpha , Market Watch , CNN , CNBC , Bloomberg , Om Malik , Ben Thompson , Business Insiderand many more fonts of brilliant insight I ’m surely forgetting have all crack their knuckle joint and typed earnest tidings about how Apple should spend its money . How on earth did Apple ever make money before there were blogger to give notice it on how to do stuff and nonsense ! Some stories go so far as to imply that the fact that Apple is n’t doing big acquisitions like its rivals , as a star sign that it’sfailing to innovate . Forget about AR or self - ram cars , or the next wave of user interfaces , if you ’d listen to these expert , the only path for Apple cash in one’s chips ahead is for it to spend tens of billions acquiring Netflix , Tesla , or The Walt Disney company .
Take Om Malik , the journalist turned venture capitalist . Foralmost a year , he ’s beenhammeringon about how Apple shouldbuy Netflix , even though the company is very much not for sale . FromAugust :
orchard apple tree — if it really wants to get into content and require to make a strong affirmation to the Hollywood institution that has obstruct its idiot box movement so far — should make a bragging , sheer stake . It should utilise its massive breed market capitalization and Johnny Cash hoard to grease one’s palms Netflix .
put aside that most of Malik ’s logical thinking is why it would be good for Apple ( he never makes an argument for why Netflix would want to betray ) , to make this sort of purchase , Apple would have to expend a ridiculous sum of money of money .
Netflix has a current marketplace cap of nearly $ 70 billion . If you assume a 20 or 30 percent premium for a takeover target ( and frankly , that could be low-spirited ) , Apple would in all likelihood need to expend near to $ 100 billion to corrupt Netflix , which again , is a company that is n’t looking to trade itself .
It ’s a similar story for Tesla , another frequent Apple takeover dream . Again , by all accounts , Tesla is NOT take care to sell itself . If it were , its chief operating officer Elon Musk , whoowns more than 20 percentof the company , would undoubtedly want a ridiculous premium , which has a current market cap of $ 55 billion . That has n’t stopped mass from bode Apple will do it anyway . Back in February 2015 , entrepreneur - turn - investor Jason Calacanisdeclaredthat Apple would buy Tesla for $ 75 billion within 18 month . Twenty - five months after , Elon Musklaughed off the ideathat Apple would buy his society .
And what would Apple even put on by own either company ? The time for Apple to grease one’s palms Tesla was back in 2013 , when the company was almost belly-up and had n’t become the juggernaut that it is today . In fact , back in 2013 , Tesla reportedlyhad meetingswith both Apple andGoogle , for a report take cost of under $ 6 billion . The time to purchase Tesla is n’t after you ’ve attempt to do your own car task ( and had to scale back those efforts ) , it ’s before . The metre to buy Netflix was probably back in 2011 , when the company examine to split itself in half to disastrous results ( RIP , Qwikster ) .
And more to the point , why should Apple listen to Jason Calacanis or Om Malik , ormefor that issue ? Apple has done a jolly good task of building a hugely successful company by following a playbook that often runs counter to the initiate and investment funds banks . The last the great unwashed Tim Cook needs to heed to are armchair psychoanalyst or investment banks who only wish Apple would consider using their services .
This is n’t a young phenomenon . In the ten years I ’ve been overcompensate Apple , these case of stories have endure ( Harry McCracken wrotea capital historyof Apple not buying things back in 2011 ) . Five years ago , Andrew Ross Sorkin write an article for The New York Times about companiesApple should moot buying , back when it was sitting on $ 118 billion in cash Sorkin was n’t necessarily urge Apple make any deals , he was just point out what companies would make sense in the context of 2012 .
It ’s actually informative to wait back at lists from class go by to see just how dumb some of those skill could have been . I mean , get ’s say Apple had taken a pointer from Sorkin ’s in 2012 and buy Twitter or Dave Morin ’s apocalyptic unsuccessful person Path — would that really have help the companionship in any significant way go forward ? Buying Research in Motion ( the society now know as BlackBerry ) could have given Apple access to some in - railcar technical school through QNX , but why do that when you’re able to justhire the bozo who created QNXand many of his squad members ( which Apple did in 2016 ) .
So no , Apple does not “ need ” to grease one’s palms Netflix , Tesla , Disney , Pandora , Sonos , Twitter , Hulu , 21st Century Fox or anything else . It might ! But not because you say so .
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