Why the Apple-Beats deal may be dead

“The basic problem with evaluating Beats as an investment for Apple is that it’s not a publicly traded company, so we on the outside have very little to go on,” Mark Hibben writes for Seeking Alpha. “The information about Beats as a business investment is pretty sketchy. There’s the report from July 2013 that Beats might hit $1.4 billion in revenue that year, but no confirmation of whether they hit that number or even got close, let alone turned a profit. The Carlyle Group’s (CG) reported investment of $500 million provides some vote of confidence. In their announcement of the deal, Carlyle also made note of Beats’ better than 60% market share for over $100 headphones.”

“I’m absolutely certain that the meeting took place as reported. Probably Adrian Perica, Apple’s M&A chief, and Eddy Cue were there,” Hibben writes. “There is one piece of information that Apple would consider covered by the NDA: the fact that the meeting took place. The NDAs have the force of a contract, but I’ve never heard of Apple suing anyone for violating an NDA. Apple doesn’t need to. Apple’s big stick to enforce the NDA is that violating it jeopardizes the prospective acquisition. Under the circumstances, most candidates for acquisition keep a low profile until the deal is done. That didn’t happen with Beats, and that’s the big red flag that calls the acquisition into question. It’s not clear what happened, but based on the now infamous Dr. Dre video, the leak probably came from inside Beats. Perhaps the people at Beats assumed on the basis of the meeting that it was a done deal. If so, they shouldn’t have.”

“By violating the NDA, the Beats management marked themselves as not fitting in with the Apple culture of secrecy. Beyond that, Apple probably has no choice but to pull the plug on the deal, if only to ensure that future NDAs would be respected,” Hibben writes. “Is it possible that the deal might still happen? I can’t completely rule it out, but given that I don’t think Apple was that strongly motivated in the first place, I’m not holding my breath.”

Read more in the full article here.

Related articles:
Has Dr. Dre’s drunken boast cost his company $3.2 billion? – May 24, 2014
Dr. Dre boasts of Apple-Beats deal in YouTube video, on Facebook – May 9, 2014

55 Comments

  1. Dr. Dre’s boorish, unclassy, and uncouth peasant behavior will hopefully get him what he deserves. It actually shows a spectacular display of low IQ not realizing the fallout of such a video with a well known secretive company like Apple. He popped a few caps into his own foot.

          1. Spoken like the rightfully insecure person you are. Only a true idiot would belabor the point about a witticism meant to mildly amuse. You don’t get much do yah? Just another disingenuous troll who challenges even the air we breathe.

        1. Oh , I noticed the ATTEMPT at humor . I’m just letting you know it was a complete failure. If you want to use a clever variation on “shooting ones self in the foot” at least use rap lyrics / terminology from this millennium to get your point across . Oh yes , that’s right you can’t . You’re just another arrogant little prick who holds on to decade old stereotypical views of rap . Continue to “Pop A few caps” I’ll leave you to it . Enjoy

          1. Aren’t you a harsh little MF’ing A-Hole? My usage did not require, in fact it would have defeated the reference to use lyrics moron! That’s asinine. You can’t take the “heat” then don’t invent the cultural slang! WTF is wrong with you people?! Get a frikkin’ life. Your not the Guardians Of “Pop” Culture.

          2. Oh and also yeah sure comedic references are always current and never is humor based on the totality of human experience and culture. References past 5 minutes ago need not apply to brains like yours who think relevance only happened in the last 5 minutes. Thank God you’re not a comedy writer though your posts here are particularly hilarious in the moronic adolescent cluelessness and disingenuousness. Someday you’ll grow up and understand and THEN feel really stupid about stuff you said here. Deservedly so.

            1. You said “get a life” while writing this comment at 2am in the morning . Then you woke up , spent a few more hours thinking about this discussion and decided to add another comment after 1pm Lmaooo . Clearly you are the one with NO life . Good day sir. I won’t entertain you anymore . Having fun responding and getting a nut off . Loser .

            2. I was NOT writing at 2am in the morning (irrelevant anyway but then you are desperate for any defense) and the extra comment was to spotlight your idiotic thinking processes. Nor do I suffer tools like you who don’t understand at all what they nonsensically post about. I realize making sense is an anathema to poorly reasoning lost souls like you. You have already well broadcast who the total abject loser is here, and it ain’t me.

              Go back to school and get an education and think beyond the past 5 minutes so you aren’t doomed to repeat yourself. But I’m not optimistic.

            3. Peter , Blood, 71 .. I hope thats your favorite number and not the year you were born. You’re too old to be going back and forth with a young buck like me. Now I almost feel guilty stressing your old heart out with these silly comments. But if you really are 42,43 then you might have a daughter of legal age . Around my age to be more specific. If that is indeed the case….well…can you arrange a meeting between us? I would love to meet her.

  2. Hopefully Apple is able to restructure any deal so they can still get Iovine on their team and the music streaming service to roll into iTunes Radio, but forget the rest of the company (including Dre). I still think that Iovine is the most important part of this deal.

    But if the whole thing fell apart, I wouldn’t care.

    1. This is where Apple comes in hard, pissed off and threatening to pull the deal due to their stupid video. What it really does is allow them to knock 1/3 off the sales price.

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