Analysts Lay Odds At 40% That Apple Buys Netflix In 2018

Steve Phelps
January 3, 2018

Apple was previously unable to bring its foreign earnings back to the US due to federal tax law, but President Trump's newly passed corporate tax cut offers companies a one-time allowance for companies to repatriate cash stored overseas without a major tax hit, Business Insider reports.

After taxes, Apple would bring roughly $220 billion, with that sum growing about $50 billion each year. The tax cut paves the way for Apple to bring its massive pile of cash stored in foreign jurisdictions to the United States. There are 40% chances that Apple will acquire Netflix according to CiTI analysts Jim Suva and Asiya Merchant.

One Wall Street bank says there's a 40 percent chance that Apple will buy Netflix.

So, why exactly do analysts think that Apple will buy Netflix instead of some other profitable company?

Citi reckons that Apple could repatriate about $220 billion in cash it has sitting around outside the U.S.in 2018, and that the company would only need spend about a third of that cash to gobble up Netflix.

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Now, it is undeniable that Netflix essentially rules the booming industry of video streaming services, and the rising number of cord-cutters in the past few years is indicative of how Netflix will certainly be a major player in this arena moving forward. This will allow Apple to make a large purchase for a company like Netflix. This note was penned before Disney bought Fox's studio and TV assets, but before that the likely hood of Apple buying Disney was in the 20 to 30% range. Let us know why or why not down below!

Apple is not new to acquisitions.

"Netflix is miles ahead in terms of programming hours, original content quality and time spent, and we don't expect this to change". Now, making iPhones and television series are two different things, which further strengthens Apple's owning of Netflix.

The thought is that Apple has long wanted a successful TV and movie offering. In November of 2017 Apple revealed its first effort into scripted series by announcing two projects, with one revealed to star Hollywood luminaries Reese Witherspoon and Jennifer Aniston. However, while Apple has tried to lure streaming customers with original content, viewers still flock to other services, like Netflix, Hulu and Amazon Prime Video.

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