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Rumor: Apple to Acquire Netflix
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Posted by: Timothy Tibbetts on 01/03/2018 08:14 AM [  Comments ]
Apple has a lot of money. How much is a lot? Over 200 billion in cash reserves depending on the day and currently, that number is 252 billion. That sort of money opens a lot of speculation on how they might invest it. 

The latest rumor is that Apple might be looking at purchasing Netflix. Netflix is worth 50-75 billion and only a handful of companies can risk that kind of cash. Speculation also comes along with the tax reform that gives the largest companies like Apple a lot of money to play with.

Business Insider analysts Jim Suva and Asiya Merchant tell clients:

“The firm has too much cash – nearly $250 billion – growing at $50 billion a year. This is a good problem to have. Historically, Apple has avoided repatriating cash to the US to avoid high taxation. As such, tax reform may allow Apple to put this cash to use. With over 90% of its cash sitting overseas, a one-time 10% repatriation tax would give Apple $220 billion for M&A or buybacks.”

A few weeks ago, Apple announced they were buying Shazam for roughly 400 million making it very possible that Apple wants to be a player in video streaming and purchasing a company the size of Netflix could be cheaper than trying to build it from the ground up.

We'd like to see some money invested in a smartphone that can make a decent voice call, but it seems our pleas for this problematic feature have fallen on deaf ears.

We'll be curious to see how this plays out. Often, these "rumors" seem to have some inside knowledge because if they are correct, they come true within days or weeks.

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