“In the past year alone, it’s become increasingly apparent that Apple needs to further diversify and pursue a growth at all cost strategy to avoid stagnancy and dependence on its cash position to demonstrate stability,” Alex Cho writes for Seeking Alpha. “We’re hoping the company takes a different direction with its M&A strategy upon tax repatriation.”
“Though it’s somewhat of an oddity that Amit Daryanani suggested a merger between Apple and Walt Disney (NYSE:DIS), I think the rationale makes a lot of sense,” Cho writes. “There are various paths Apple may pursue outside of media to reach $50 billion+ in total service segment revenue. It’s worth noting that the cash pile sitting overseas is generating pathetically low yields and should be utilized from an ROE framework where excess cash should either be deployed or returned to shareholders.”
“This is where the analysis gets extremely subjective, because we’ve never seen a mega-merger between companies of this scale,” Cho writes. “We’re talking about Walt Disney and Apple at $179 and $741 billion market capitalization, respectively. ”
Much more in the full article here.
MacDailyNews Take: First, let’s get the U.S. corporate tax situation under control. We’d love to see a permanent fix for repatriation, instead of another one-off tax holiday that fails to address the root problem.