Should Apple absorb Netflix?

“Some people associated with Apple previously have suggested that is has Netflix in its crosshairs,” Bidness Etc. writes. “This acquisition could help Apple maintain growth, especially since reports suggest that Apple might be interested in rolling out its own TV subscription service.”

“Rumors regarding Apple’s search for a media company emerged when a recent Financial Times report said Apple executive Eddy Cue, who heads iTunes, iCloud and Apple Music, had proposed the idea of acquiring Time Warner in a meeting last year,” Bidness Etc. writes. “However, investment bankers linked with Apple told the Financial Times it would be more interested in acquiring a streaming company like Netflix, rather than a pure content player.”

“Netflix trades at almost $92 per share, which is well below its 52-week high of $133. The stock has a P/E ratio of 338 and 7.4X sales. At present, Netflix’s market capitalization stands at $39 billion, while Apple’s current cash pile is $220 billion,” Bidness Etc. writes. “That number suggests Apple can afford to be generous with its investments in several directions, and that acquiring Netflix will not be a debacle.”

Much more in the full article here.

MacDailyNews Take: As we wrote back in May:

What is unique about Netflix? A handful of TV series are not worth $40 billion. Apple is perfectly capable of taking on Netflix without having to buy them, deal with integrating their employees, etc.

Until Apple actually buys Netflix, we’ll keep saying that Apple will buy Netflix for the same reason they bought Palm.

SEE ALSO:
Apple to buy Netflix? – May 27, 2016
Should Apple buy Netflix for $53 billion? – May 10, 2016
Why Apple should buy Netflix – January 7, 2016
Apple’s move into content creation could devastate Netflix and Amazon – September 1, 2015
Why Apple should buy Netflix – April 21, 2015
Why Apple should buy Netflix – March 26, 2014
Jim Cramer: Apple should buy Twitter or Netflix to spur growth – February 7, 2013
The Netflix buyout battle: Apple vs. Time Warner – April 10, 2012

20 Comments

  1. I would rather see them absorb SlingTV. I want a cable replacement and need to cut the cord. I’d love it to be in provider specific apps or a tightly integrated system-level app.

  2. I swear I remember reading an article about Netflex a while back and something about all the streaming contracts would be null and void in the event Of Netflex being sold. Is this still true?

  3. Stock has done nothing but lose its investors money for the past 2 years while the market and other high fliers (FB, AMZN, GOOG) are reaching all time highs. I am sick of the pompous attitude of the writers here. They should spend some damn $ and buy something huge (not like the Beats acquisition has made a difference yet). Despite the blinders we investors wear, we still hold and are serially disappointed. We are having issues in China and iPhone 7 is now barely evolutionary. I have had a very significant investment in Apple since it was 65 but my money has been dead for the last 2 years and unfortunately my other portfolio holdings amount to barely 5% of the Apple position (yes, I know that is stupid but it is what it is). Tim Cook appears to pretty much suck and hasn’t done much since taking over. We have no Apple TV, no Apple car, and while I wear my Apple Watch and my rolexes have been relegated to their winder for ever, the watch kind of sucks also. It’s better than a standard watch, but isn’t changing my life for the better. So buy Netflix, buy Pandora, or pick up something cheap and instrumental to the world, Twitter. Buy something and do it now and please, writers, stop insulting other companies without looking in the mirror. Just found out that Michael Dell is one of the top 50 richest men in the world and is alive and healthy. Can’t say the same for Steve, who was also too pompous to get proper medical care and left his company in the hands of a man who has no vision and is allowing the competition to beat and surpass us. Change is required and if the stock isn’t above 100 by August, this story is pretty much over. It’s sad, but unfortunately true.

    1. If you were a long term investor in AAPL, you would not expect any substantial rise before August. AAPL usually has a relatively quiet summer and all the action ( good or bad ) tends to happen around when the new iPhones are released in September. AAPL often rises in anticipation of the new iPhones from mid to late August.

      That’s exactly why I try and buy AAPL in the summer or sell in September, just before a new release.

  4. I feel for you Michael. I have friends and family with Apple stock and they’re smiling through gritted teeth and trying to be patient.

    The Apple Watch is an unqualified success though I myself am waiting for the next generation. Every person I know that bought one uses it daily still. Not bad for a first attempt.

    The iPhone 7 rumors are just that, only rumors. I would not be surprised if they turned out to be accurate but I’d rather wait until September and find out definitively than react adversely to possibly spurious assessments today.

    In all of this keep in mind that your  Watch is still the best of breed, the 6s is still the best smartphone out there, the iPad is still the best tablet, the iMac is still the best desktop and the MacBook Pro is the best laptop.

  5. Again with this. Netflix owns little to nothing. It is made up of billions of dollars worth of provider content and a couple of high dollar original shows. Its infrastructure is owned by Amazon (AWS) and CDNs for last mile delivery. What would Apple get for its billions that it couldn’t do within iCloud and buying boatloads of content from providers. This idea pops up every couple years. It is nothing but a pump to keep their stock price from falling.

    1. “What would Apple get for its billions that it couldn’t do within iCloud?”

      Is that sarcasm?
      Apple’s iCloud is not in the same league as Amazon, Google or Facebook.

  6. Nope! Hulu is the one to aquire. All the network players are getting desperate to sell. Apple can then get the remaining networks in and have accesss to all the networks in one fell swoop. It’s about new content, that’s why Netflix is changing. And Hulu is all new content.

    I actually used to love Netflix. I don’t know what it is anymore and they never have any of the new movies. Netflix is not going anywhere but but maybe down.

  7. buy a company with a P.E of 300 + while aapl has PE of around 10?

    maybe if they valued it like aapl, i.e not 30+ billion but ONE billion plus.

    note that last quarter Netflix earned a profit of 28 million
    Apple earned 10,500 million
    neflix will not even make a noticeable pimple on Apple’s profits and therefore completely irrelevant in moving the stock.

  8. I don’t think they will, they did have a brain fade when they bought Beats so I won’t put it out of reach from the present Apple management, even if they do it will be a much better buy than Beats.

    Apple should be more of an enabler by making awesome products, which will be used by content producers to serve their customers. Their cash pile is because of the product they created which is used to deliver content to the users of their products, how many content producers have that kind of cash pile or even turnover.

    Content is king but a good delivery system beats everything else hands down, and apple has the best ecosystem right now for enabling that.

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