Well, it’s officially 2018, and one giant corporation is potentially looking to buy another. Citi analysts believe that there is around a 40% chance that Apple will purchase the largest content-streaming company in the world; Netflix. Of course, a splash like this to start off the new year will most definitely garner plenty of headlines, but the question is, why do these analysts think Apple will be going after Netflix?
Apple’s Overseas Funds
As the calendar’s turn over, Apple will have a whopping $252 billion in overseas funds to repatriate. With all that money floating around, Apple will need to distribute it somewhere. Of course, the multi-billion-dollar tech company could simply disperse the money into existing departments like research and development or purchasing back shares and growing their dividends, but $252 billion is plenty of money to make a much bigger investment into the future of Apple. Netflix would make the most sense, but if Apple wanted too, it could even dive into the possibility of acquiring Walt Disney or Tesla.
It is no secret that Apple has wanted to jump into the content-streaming industry for quite some time now. In fact, they have already committed $1 billion toward creating their own new shows. It would be completely uncharacteristic for Apple to shell out $75 billion for a company like Netflix, considering their largest acquisition was the purchase of Beats by Dre for $3 billion in 2014. Nevertheless, the headlines were created by Citi, and they have nothing to lose with their prediction. By laying a 40% chance on Apple buying Netflix, they could simply say that Apple went the way of their 60% outlier that Apple would avoid the acquisition. On the other hand, if Apple were to dive into content-streaming by buying Netflix, those Citi analysts would look like geniuses and would be able to use that bold prediction to excite current clients and possibly entice future ones.