Would Apple buy Disney to shake things up?

Would Apple buy Disney to shake things up?
Since hitting its peak price of $233.47, Apple's shares have declined nearly 35% to Friday's close of $148.26. While some of the decline occurred last week after Apple lowered its revenue guidance for the fiscal first quarter, much of the decline took place beforehand as 2018 iPhone sales have failed to reach expectations. Apple has been hoping that growth in Services would help make up for the iPhone's lack of growth, but it is apparent that the company needs a new product line to get Wall Street excited about the company again.

CNBC notes that Apple has $237.1 billion in cash on hand, a huge war chest that could allow the company to make a huge acquisition. While several analysts told CNBC that Apple should buy a company like Disney, Salesforce or Tesla, none of them thought that Apple would pull the trigger on any large deal. After all, the company's valuation has just dropped by more than $300 billion, and the largest purchase ever made by Apple was its $3 billion purchase of Beats back in 2014.

Disney might be the most logical acquisition for Apple, especially since Apple plans on launching a streaming video service this year. Steve Jobs was once Disney's largest stockholder, and sat on the Disney board. Of the three possibilities floated by analysts, this one would be the most expensive with a price tag north of $200 billion. Still, it would turn Apple into a media company that throws off an amazing amount of cash. With millions of visitors attending Disney's theme parks each year, Apple could get its devices and names in front of these consumers at little cost. In addition, Disney is beloved by millions around the world. Apple, not so much.

Salesforce wouldn't seem to be a fit, say analysts, since the enterprise software business isn't something that Apple is familiar with. But Wall Street might take a shine to a decision by Apple to step outside of its comfort zone in order to grow. Salesforce, valued at more than $100 billion, wouldn't come cheap, but the company has grown its revenues by 20% each year.

The last option mentioned by analysts, Tesla, could be a fit because of Apple's work on an electric car. Elon Musk has stated his desire to take Tesla private, and an acquisition by Apple would do the trick. With a market value of $54 billion, Tesla would be cheaper than Disney or Salesforce. It also would play into Apple's strength in designing and manufacturing consumer products.

Apple has previously been linked to possible purchases of Tesla and Disney, but this time things seem different. Apple is no longer seen as invincible with Wall Street wondering where the growth will be coming from now that the iPhone is under attack. Even Apple CEO Tim Cook knows that things have changed. On Wednesday, he told CNBC that he wouldn't rule out a large acquisition.

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30 Comments

1. KhaledChebat

Posts: 5; Member since: Mar 10, 2015

Small correction: "(...) With a market value of $54 billion, Tesla would be cheaper than Apple or Salesforce." Should be: "(...) With a market value of $54 billion, Tesla would be cheaper than Disney or Salesforce." It's Disney not Apple

10. lyndon420

Posts: 6270; Member since: Jul 11, 2012

Typos happen lol.

12. Alan01

Posts: 560; Member since: Mar 21, 2012

Hey, thanks for pointing that out. Correction made! Regards, Alan

26. Back_from_beyond

Posts: 1058; Member since: Sep 04, 2015

Why do you guys post this every damn year around the same time and every year nothing of the sort happens? If it's that baseless a story, why bother? I've seen this come by for 3 years straight now.

27. mootu

Posts: 1253; Member since: Mar 16, 2017

You may also want to point out that CNBC's figure of $237.1 billion is wrong. In the interview that phonearena reported Tim Cook himself states that Apple have $130 billion in net cash. https://www.phonearena.com/news/Watch-Apple-CEO-Tim-Cook-explain-unprecedented-sales-drop-in-detailed-interview_id112398 He makes the statement just after the 12 minute mark in the video.

2. Blazers

Posts: 683; Member since: Dec 05, 2011

Hmmm for Apple to drop $200 mil for Disney, sounds like a last resort. Although they could be in panic mode right now, and pressure from shareholders to make a deal could force Cooks hand.

23. worldpeace

Posts: 3024; Member since: Apr 15, 2016

*$200 Billion

25. Finalflash

Posts: 4049; Member since: Jul 23, 2013

First of all, Tim doesn't have the balls to throw that kind of money around because he's a numbers guy and would rather see more zeros in the bank than value in the brand. Second, people think that a buyout is a one to one deal but only an idiot would think that Disney would sell at cost. Paying even a 20% premium on the stock would empty Apples supposed warchest (even though 150 billion of that is earmarked for dividend payments). Also, with Apples stock in freefall recently, buying with stock would also not be possible without an even higher premium. So stop saying Apple can buy Disney, there just isn't any way in hell that would happen anytime soon.

3. Subie

Posts: 2222; Member since: Aug 01, 2015

Why would Steve Jobs once sitting on the Disney board factor into this? John Chen currently sits on the Disney board so then maybe there should be a Blackberry Disney joint venture...;)

4. Blazers

Posts: 683; Member since: Dec 05, 2011

Just pointing out that there is a history between the two companies, not that it would factor into any potential sale.

5. Blazers

Posts: 683; Member since: Dec 05, 2011

Uhhh no. That will never happen. Apple and Samsung have a better chance of merging, then a Blackberry/Disney partnership.

7. Subie

Posts: 2222; Member since: Aug 01, 2015

Take a look at the emoticon punctuation at the end of my post if you think I was serious. Cheers.

6. w159148

Posts: 19; Member since: Jan 02, 2018

Would someone please take time to explain why everyone is just citing the fact that Apple's the one losing revenue? Samsung saw a 34% drop in their sales revenue in their best quarter compared to Apple's 7%.

8. Subie

Posts: 2222; Member since: Aug 01, 2015

Where are you getting that number from?

30. w159148

Posts: 19; Member since: Jan 02, 2018

Wall Street Journal, Samsung reported the number themselves.

9. cmdacos

Posts: 3647; Member since: Nov 01, 2016

Even if we are talking just pure mobile for Samsung, their best quarter was q12018 and had YOYand QOQ revenue improvement.

11. lyndon420

Posts: 6270; Member since: Jul 11, 2012

Because apple stock is the only one worth mentioning over and over again. Apparently everything they do affects everything else in the galaxy. And I think apple buying Disney would be a bad idea for Disney and consumers.

20. NarutoKage14

Posts: 1261; Member since: Aug 31, 2016

Yup. Imagine Apple's walled garden being applied to all Disney media.

21. Leo_MC

Posts: 5878; Member since: Dec 02, 2011

Just imagine how bad it would be not being able to steal Disney pictures anymore...

17. almostdone

Posts: 407; Member since: Sep 25, 2012

Samsung doesn't rely on their smartphones. They make a zillion other products. Also Samsung makes components for smartphones so no matter who does well they also do well.

19. sissy246

Posts: 6826; Member since: Mar 04, 2015

" Apple's shares have declined nearly 35% to Friday's close " Where are you getting 7%

28. mootu

Posts: 1253; Member since: Mar 16, 2017

He's talking about sales revenue not share price.

13. JamesDiman

Posts: 12; Member since: Jun 04, 2015

Apple buying Disney would not be a good thing. Like you stated in the article, "Disney is beloved by millions around the world. Apple, not so much.". I love Disney theme parks, movies and it's characters. If Apple bought Disney, anything going forward, I could not purchase or condone. I don't even know if I would visit their theme parks anymore. Apple is evil, and does not care about customers. Prices for the parks would go up, license fees would go up, toy prices would go up. It would not be a good thing for the consumers. If you buy something that looks like Mickey, the ears would be sold separately as a dongle.

14. Rager722

Posts: 577; Member since: Jan 30, 2013

You're acting like Disney is not evil too, they're just evil in a hidden way. In a way Apple and Disney are more similar than you think.

15. JamesDiman

Posts: 12; Member since: Jun 04, 2015

I agree that all companies have some sort of evil in them. But Apple has been evil for all their 40+ years.

29. Rager722

Posts: 577; Member since: Jan 30, 2013

Disney has been evil for much longer.

18. almostdone

Posts: 407; Member since: Sep 25, 2012

Apple will never spend a large chunk of their money. They're simply too greedy. They'll rather hold on to the money for dear life even if it sinks. Although this is very unlikely though.

22. Leo_MC

Posts: 5878; Member since: Dec 02, 2011

Why buy a company when you can control it? Both have the same owners. Things happen in a game of golf between the presidents of the investment companies, Cook and Iger: while going from hole 17 to hole 18, if they decide that Disney should collaborate with Apple, the next day Mickey is going to use an iPhone.

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