No, Apple won’t buy Netflix when they repatriate their billions

“Don’t expect Apple to buy Netflix this year with the billions of dollars it repatriates – despite that widely shared analyst report this morning that offered almost even odds of such a deal,” Mark Sullivan writes for Fast Company.

“The new GOP tax bill, signed by the president in 2017’s final days, gives Apple the option to bring its huge $250 billion of cash held offshore back to the U.S. at a far lower tax rate (15.5% versus the 35% in the old law),” Sullivan writes. “A couple of Citi analysts, Jim Suva and Asiya Merchant, believe Apple may use a big chunk of that repatriated money to buy Netflix. They give the deal a 40% chance.”

“Apple won’t bring its entire cash hoard back to the U.S., a source with knowledge of the matter tells Fast Company. It will bring back only about half in 2018,” Sullivan writes. “My hunch is that Apple will continue using its largesse in Hollywood to buy or create new video content. Because the company’s services business is already doing so well, and growing as hoped, Apple will feel no pressure to leap to the top of the subscription video market with an acquisition of Netflix. It’s much more likely that Apple will use its newly repatriated money to buy back stock and reward shareholders with dividends.”

Read more in the full article here.

MacDailyNews Take: Yup.

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. — MacDailyNews, May 27, 2016

Another $125 billion in buybacks would be seismic.MacDailyNews, November 18, 2016

SEE ALSO:
Citi analysts: 40% chance Apple will acquire Netflix now that President Trump’s corporate tax cut has been passed – January 2, 2018
Citi: Apple 40% likely to acquire Netflix, 5% likely to acquire Tesla – May 5, 2017
Analyst: Apple could double dividend, buy Netflix with repatriated cash under President Trump’s U.S. corporate tax changes – March 17, 2017
No, Apple doesn’t need to buy Netflix – February 22, 2017
Why Apple should buy Netflix or something – February 22, 2017
Apple’s arrogance said to contribute to struggles to make big deals – February 15, 2017
Apple hires Amazon’s Fire TV head to run Apple TV business – February 8, 2017
Why Apple should buy Disney – January 26, 2017
Apple’s new TV app shows just how painfully behind Apple is – December 14, 2016
Apple approached Time Warner about possible merger before AT&T talks – October 21, 2016
Apple’s Eddy Cue: Nope, we don’t want to be Netflix – October 20, 2016
Google signs up CBS for planned web TV service to debut in early 2017; close to deal with 21st Century Fox – October 20, 2016
Bernstein: Apple buying Netflix would be a waste of $50 billion – October 5, 2016
A chance for an Apple buyout offer as Netflix stumbles – July 19, 2016
Here comes á la carte programming – without Apple – July 13, 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
Apple declines to place bid on NFL Thursday Night Football – March 3, 2016
Why Apple should buy Netflix – January 7, 2016
Apple TV 4 is a beta product and, if you bought one, you’re an unpaid beta tester – November 5, 2015
Apple made ‘audacious bid’ for Top Gear trio of Clarkson, Hammond and May, but lost out to Bezos’ 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

19 Comments

    1. EVERY SINGLE AMERICAN will see part of it as Apple will be paying 15.5% tax if they bring it back (8% if Apple invests it in USA)

      So did the overseas folks as the money was already taxed overseas.

      Plus all the dividend recipients even foreign investors will be paying USA income tax when they get their dividends (income tax which will benefit all USA citizens ).

      (shareholders buy shares with their AFTER taxed income, then when they get dividends — dividends from corporate profits which have been taxed — they will be again pay INCOME tax on the dividends . In other words: Corporations pay tax and from what’s left they might give out some dividends and then shareholder recipients have to pay tax on those dividends again ! — and when shareholders cash out their shares they will pay CAPITAL GAINS tax. it’s amazing how well companies need to perform for shareholders to make any money at all. ).

        1. eh you’ve NEVER seen an Apple store?

          you didn’t see the numerous articles of the new stores like the Chicago store here in MDN?

          ?1508762419

          apple didn’t build it? It dropped from Space… ? Paid off not by apple but aliens … ?

          most Apple stores are owned by Apple and not rented.
          apple has numerous research facilities all over the USA.
          it has also invested in chipmaking , glass fabricators, not to mention the Mac Pro plant.

          You also did’t even hear about Apple’s USA TECH INVESTMENT FUND?
          here: Apple.com:

          “Sherman, Texas — Apple today announced the latest award from its $1 billion Advanced Manufacturing Fund. Finisar, a leading manufacturer of optical communications components, will receive $390 million as part of Apple’s commitment to support innovation and job creation by American manufacturers.”

          1. You miss the point..

            Apple plans to invested in Finsar. The timing of Apple’s announcement followed by a week later of the senate passing the tax bill followed by Trump signing the bill a week later is, funny.

            How much public money and lost income did Texas have to give up in order to build that new plant in Texas? How many workers will work at this new plant?

            1. miss the point?

              I was answering your statement : “The only thing Apple builds on American soil is spaceship campuses and data centers.”

              ———-
              Apple also invested in Corning.

              Years ago it also invested in the Sapphire Glass factory.

              (just a five minute Google search just on apples Texas investments following your Texas comment )

              It also expanded it’s campus in Texas in 2012 .
              “Texas Governor Rick Perry announced today that Apple will be adding a new Austin campus to its list of facilities. The company will be investing $304 million in the plan, which Perry said will involve hiring 3,600 workers over the next decade”

              Years ago Apple also had a joint venture with Samsung (Samsung invested Billions) in Austin Texas to make the ‘A’ Series chips.

              etc etc etc

              ———–
              like I said elsewhere it’s almost pointless to argue. If you think corporations setting up is bad for a place (like Texas) then people like you should go to live in some third world shit hole where there are no investments by corporations (and thus no income, you know where salaries are $10 a month or less ) …

        2. Does anyone even know what Apple is using those data centers for? They’re sure not making any money from them like Amazon, Google or Microsoft is. It’s seems as though Apple is the only major tech company not to have a profitable cloud business. They say Apple is spending plenty of money on data centers but never seems to be getting any of that money back. I’ve tried to find what they’re being used for but it’s basically just simple Apple internal stuff for supposedly very advanced data centers. Apple doesn’t have anything like Youtube or AWS, so what gives?

          1. As far as I have read, Apple’s datacenters are specifically for Apple’s iCloud use. Note however that it is only a fraction of the total datacenter footprint the entirety of iCloud requires. The vast majority of iCloud still remains ‘outsourced’ to Amazon and Microsoft data centers. In essence Apple’s datacenters are Cost Centers, a cost of doing business for them.

      1. You’re assuming all that money was taxed overseas. That’s simply not true. Apple, like all multinational corporation, parks a lot of their money in tax havens that charge little or no corporate tax. And when the EU went after Ireland for allowing Apple (and others) to avoid tax liabilities, Apple just up and moved to the Isle of Jersey.

        In 2014, Apple moved two subsidiaries from Ireland to Jersey, described by The Guardian as “a crown dependency of the UK, which makes its own laws and is not subject to most EU legislation, making it a popular tax haven.” Jersey, according to the Times, “typically does not tax corporate income.”

        1. 1) Apple not paying taxes is a myth.

          2) Do YOU take legal tax deductions when they are offered when yo file your income tax ? Apple shouldn’t tax deductions or look for lowest taxes? NOT doing so is actually illegal for companies like Apple because of the laws governing corporations force management to do the best it can. it can be sued by shareholders.

          3) Apple followed the law in Ireland (that’s why the Irish govt. itself is defending Apple), changing the law mid stream is unfair. The so called EU tax heavens were legal and was set up by EU politicians to help their EUROPEAN corporate buddies ( that’s what the whole reason why the EU was set up in the first place : to HELP EUROPEAN BUSINESSES ) but when Apple used the same legal methods europeans used there was a big flare up because Apple was a foreigner — killing European companies like Nokia — and also because the amount of cash Apple has. Look at the ambulance chasers with Apple’s battery gate vs the things which are like a 1000 times worse like Samsung’s Exploding phones, Apple gets shafted . Apple is a big fat target because people think it’s got money. Apple is good target because as an American company it’s got NO POLITICAL power as opposed to European companies which are in bed with EU officials)

          ——-

          it’s pointless to argue, too many people think that corporations are evil ( I guess the don’t have jobs as all jobs in the end are supported by corporations even government jobs) and going on welfare on retirement is the the honourable thing to do while investing in stocks for retirement is evil (Note even government pension plans like teacher pensions are all in stocks as well as most 401s, retirement plans with mutual funds )

      2. “EVERY SINGLE AMERICAN will see part of it as Apple will be paying 15.5% tax if they bring it back (8% if Apple invests it in USA)”

        Not so. We went through this several weeks ago. The 15.5% rate applies to liquid assets currently held overseas by a US corporation, whether it is brought back or not. The 8% rate applies to non-liquid assets (like plants and machinery) currently held overseas.

        The new tax law does not provide any incentive for bringing the funds back, rather than leaving the post-tax proceeds overseas. It likewise does not provide any incentive for investing in US infrastructure, rather than just distributing the proceeds to shareholders and company management.

        We could debate the merits of the Trump Tax Bill endlessly, but only if we are talking about what the bill actually does.

        1. if Apple is taxed 15.5% every american will get a share (as taxes are supposed to be used by Government for everyone) , that’s my point. the fact that Apple will also be taxed even they don’t bring it back reinforces this point.

    1. I’m willing to bet those Apple buying Netflix rumors are pushing up Netflix’s share price which is darn good for Netflix shareholders. Netflix now has a nice P/E of 207 while Apple’s P/E has dropped back to under 19.

      Apple easily has the ability to do much more if it’s purely a matter of having money to spend. As an Apple shareholder, I’d like higher dividends but I’d also like to see Apple do more in terms of furthering science, health or technology. Heck, I wish Apple could get heavily into robotics and AI but maybe that would be spreading themselves too thin. Maybe Apple can’t do everything but I’d sure like to see the company earn some respect and not be seen as a has-been company with no growth potential.

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