“There has been a lot of coverage of Apple’s interest in Beats. Apple is acquiring a world class brand in music, and the streaming service seems to be the major driver here. However, I was a bit surprised at those that make it seem like this is the end of the world for Apple. I guess the Apple bears have to complain about something,” Bill Maurer writes for Seeking Alpha. “I’d be curious to hear from the bear camp if the purchase price was $2.5 billion or even $2.8 billion instead of the rumored $3.2 billion. Would those complaints be less in that case? What if Google (GOOG) was the potential acquirer? I’m sure Google would get praised for it.”
“In the end, if this was a $30 billion acquisition, I’d be a bit more worried,” Maurer writes. “This acquisition would represent around 0.6% of Apple’s market cap, and just 2% or so of Apple’s cash balance… While this acquisition would be much larger than Apple’s previous acquisitions, a $3 billion or so deal is extremely small in the world of Apple. When all is said and done, I believe many of the critics of this deal will be silenced.”
“The focus will now start to shift to the upcoming iPhone launch. Two larger phone screens are expected, but the important question is when? Fiscal Q3 will be impacted more by the China Mobile and Docomo deals, and Q4 will all be about the new iPhone. The timing of the launch will be critical for revenues and earnings, so investors and analysts will need to adjust accordingly,” Maurer writes. “Right now, Apple offers the best total package through the end of 2015 thanks to the buyback. Like Apple, investors need to decide whether or not to buy shares now, or wait for a pullback. A decision is also required on whether to buy pre or post-split… I [have] updated my price target on Apple shares to approximately $619, so I believe this stock has more upside.”
Read more in the full article here.
Target of $619? Is that for the end of this week or what? Apple has popped more than 13 bucks in a day, so I’d say this guy’s forecast is ultra conservative to say the least.
If it’s < $2 billion deal, it's a good deal.
If it's a $3.2 billion deal, it's certainly not the end of the world, but it's indicative of decision-making that gives me pause.
The appearance of a $30 billion deal is something you'll only see printed in Seeking Alpha.
lol – yup.
ROUNDING ERROR..
Silencing Apple’s critics? I don’t think so. They just keep shouting, unaware that fewer and fewer are listening…and the puck is further and further away.
Apple needs increases in content, cloud and computing at all levels.
They know this internally better than anyone of us on the outside.
I have a filter on my gmail so articles by this author are filtered out. He is the type of Anal-cyst that only present the data that suits the article he wishes to write instead of all the available facts. Even when he includes data that is obviously against his argument then by a simple twist of the pen and the positive argument is now a negative.
Ignore him for your sanity.
Google buys Motorola for 12 billion and sells it for 2 billion a little over a year later and the “analysts” barely bat an eye.