“Netflix is valued at $47 billion as of this writing. The company is expected to report revenues of $8.7 billion in 2016, up 28% over the expected revenues of $6.8 billion in 2015,” Jay Somaney writes for Forbes. “So, Apple’s App store grew its revenues from $15 billion in 2014 to $21.45 billion in 2015 giving us a growth rate of 41.5%. Let’s assume that growth rate slows down to the growth rate of Netflix for 2016 which is 28% (although it shouldn’t drop that much anytime soon). That would mean App store revenues in 2016 would be approximately $27.5 billion. Using the same revenue growth multiple that the market is giving Netflix at present which is 5.4x, would give us a valuation of $149 billion for the App store alone.”
“In reality, a stand-alone App store stock could be worth significantly more using the same multiple and assuming there was no fall-off in App revenue growth rates in 2016, or even an acceleration in growth rates as newer Apps are added as additional new products are introduced by Apple,” Somaney writes. “So, if the App store alone could potentially be worth almost $150 billion at least, why doesn’t Tim Cook consider a spin-off?”
Somaney writes, “That would unlock some massive value for shareholders.”
Read more in the full article here.
MacDailyNews Take: Carl or similar will be on the horn asking Tim that question in 3..2.. if he hasn’t done so already.
You put ’em together. Make some money. Then you take ’em apart. Make some more money. Repeat ad infinitum.
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