Bernstein: Apple buying Netflix would be a waste of $50 billion

“Bernstein’s Toni Sacconaghi today reiterates an Outperform rating on Apple, in a client note put out with his colleague Carlos Kirjner, who follows Netflix, in which both gentlemen argue that Apple should not spend billions buying Netflix, for a few reasons,” Tiernan Ray reports for Barron’s.

“Sacconaghi and Kirjner make no reference to any specific rumors on the matter. Instead, they note that ‘Apple acquiring Netflix is a dream-scenario for many Netflix bulls, and a possibility often raised by investors,'” Ray reports. “‘There is no question that Apple can do it – its market cap is over 13 times Netflix’s $45 billion EV, and Apple has nearly $150 billion in net cash on its balance sheet,’ the authors observe.”

Ray reports, “‘The question is really whether or not Apple will acquire Netflix’ [the analysts write]. ‘Overall, we do not see a compelling rationale for Apple to acquire Netflix.'”

Read more in the full article here.

MacDailyNews Take: As 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:
A chance for an Apple buyout offer as Netflix stumbles – July 19, 2016
Should Apple absorb Netflix? – July 11, 2016
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

17 Comments

  1. With Netflix you get a collection of servers, media contracts, and a brand name. All of this can easily be duplicated by someone more competent than Eddie (Mis) Cue who pissed away $3 Billion on a me too music rental service run by a company known for shitty headphones and less than hones business dealings.

    1. Hey DavGreg
      I’m listening to some Beats in ear thingies that my wifey got and never used.
      They are exceptionally good.
      Totally with you on your views about Eddy I’m sorry to say. He’s a great guy but not the right man for job any more than I would be.

    2. As much as I dislike Beats headphones, the fact is that they had over 64% market share in headphones that sold for over $100. Apple has already earned more in revenue from Beats in the past two years than what it cost to purchase them. Give it one more year, and the headphone business itself will have turned a net profit on the $3 billion investment.

    1. As soon as Apple were to buy Netflix, the value of Netflix would immediately drop to half its current value. Anything Apple touches will quickly lose value as investors bail. The big investors don’t want anything that Tim Cook is in charge of.

      1. macnificent…, I was with you until you pulled the Tim Cook hate manoeuvre. Setting that 🐂💩 aside…

        Apple represents the 21st century media business system, which the decrepit geezers at the MPAA and the RIAA despise. These dunderheads already have troubles dealing with the likes of Netflix. Bringing Apple into the picture would result in aneurisms. We’re still waiting for the olde guard of media to retire or drop dead before there’s practical positive change.

  2. Although I believe buying Netflix is a waste of money, then what can Apple do to boost its share price? Nothing seems to be working. Not dividends, stock buybacks or iPhone sales. Apple isn’t coming up with anything to boost revenue, so shareholders are simply confused about what Apple should do. The rest of the major tech companies don’t seem to be having much of a problem getting investors to put money into their companies. Only Apple remains a slug. Everything Apple does has no positive effect on the share price. So, what’s the answer? Should Apple simply do nothing?

    I’m sure Apple could duplicate Netflix if it wanted to but I think that’s very unlikely. I doubt Apple wants to even try to put Netflix out of business. Amazon would have no problem with that, though. I watch a lot of science shows on Amazon with Amazon Prime Video. Apple has nothing like that for $99 a year. Not that it matters. I mostly watch anything I want for free with Kodi and bunches of video add-ons.

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