“Apple’s biggest deal in its history just got a little cheaper,” Claire Atkinson reports for The New York Post. “The tech titan is expected to announce its acquisition of Beats Electronics this week — at the slightly reduced price of $3 billion, The Post has learned. A report in the Financial Times earlier this month tipping the deal put the price at $3.2 billion.”
“That may have been the case, but negotiations between Apple CEO Tim Cook and the company co-founded by Dr. Dre were not helped by a leaked report that had Beats Music with just 111,000 subscribers to its streaming service in March,” Atkinson reports. “Still, the company is understood to place a high value on the profitable Beats audio business, which retails headphones — costing up to $450 — and speakers around the globe. That business recorded sales of $1.3 billion in 2013. ‘Apple hadn’t even begun its due diligence process when news of the number came out,’ one source close to the talks said Tuesday.”
“While Dre boasted in a much-watched video that the sale would make him hip-hop’s first billionaire — Forbes estimated he could gross up to $800 million on a $3.2 billion sale from his 20 to 25 percent stake — a discount could make it hard to reach a 10-figure net worth. Dre earned $275 million over the past three years, according to Forbes,” Atkinson reports. “If Dre owns 25 percent of Beats and the deal goes down for $3 billion — grossing the hip-hop legend $750 million — he could fall just short, as he would have to first pay the IRS.”
Read more in the full article here.
[Thanks to MacDailyNews Readers “Judge Bork” and “Bill” for the heads up.]
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How about cutting off $2 BILLION Apple?
Yeah, they misplaced a decimal point.
I still don’t see how Beats is worth anywhere close to $3 Billion.
Especially since the products are atrocious and Jimmy Iovine in particular should be ashamed. I’ve heard them. The corporate slogan for Beats must be “Never overestimate the intelligence of the American consumer.” ‘Nuff said.
You may not like Beats headphones, but millions upon millions of teens and young people LOVE them. So Apple could have headphones that a few audiophiles love, or Apple could have headphones that millions of consumers who regularly buy (and subsequently break/lose and replace) buy.
Gee, what’s the better business decision?
No accounting for taste as is evident by what young people buy as music today. I know I sound like my parents but at least in my day you had to succeed more by talent than production tricks.
Meanwhile, we do not really know the workings of Mr. Tim Cooks mind or Apple inc. for that matter but what the heck! as long as they remain as secretive as ever, I will post whatever speculative story I can on the basis that most other speculative stories have been seriously wrong, somewhat wrong or slightly wrong, thereby meaning that I am not placing myself in a precarious position. In fact I could just enhance my analytical credibility by turning out to be slightly wrong!!
So publish away New York Post! You will sell more papers and I will become more desirable as a press journalist/analyst!
Ps. If Dr. Dre and I am presuming he is no medical or PHD Dr. were to be paid $500 million, that would be far more money than he could spend in his entire life time without giving it away.
So the only loss he would suffer is that of face.
You and I given that kind of money would not be blogging on this site or any other site for that matter, we would be in sunny climes on the receiving end of a serious pampering 🙂 !
The best outcome for him and Apple inc. ids for him to receive the full sum he deserves on condition that his stock share of Beats is handed over to Apple inc. Leaving him to concentrate on what he does best, Hip, hopping and partying.
And that’s why he is making the big bucks and you’re not. He’s not really interested in spending that money, he’s looking at the status he desires, the inclusion into the world of big business, and the title of first hip-hop billionaire.
$200,000,000.00, dat be chump change.
Apple, try cutting on the other side of the decimal point.
I was gonna post that! Pay the 2m, forget the 3B!!!
This has been, er, “imminent” for weeks now. I’m thinking it’s all bullshit, but I’m sure we’ll see by WWDC.