Viewing a single comment thread. View all comments

ronearc t1_iy5f0an wrote

Reply to comment by Silicon_Knight in Bob Iger Tells Disney Town Hall Hiring Freeze Still In Effect, No New Acquisitions Planned & Not Merging With Apple by Neo2199

Apple has a stupid amount of available cash on the books, and unless they're run by idiots (they're not), they're eyeballing a lot of big merger and acquisition opportunities which would allow them to divest substantially from their current position which is almost singularly dependent upon continued cooperation from China.

Any companies that can offer them that may be in their M&A sights. I've been concerned for awhile that they might gobble up Disney, and I'd hate that. While Disney isn't exactly the poster-child for responsible corporate behavior, they're better by a long stretch than Apple.

6

smokeyjay t1_iy5k5yz wrote

The nice thing about Apple is that they usually don't blow all their money on dumb acquisitions. I think Beats was their biggest acquisition and that was 3 billion. For a tech company, there pretty cost discipline.

12

ronearc t1_iy5lgbu wrote

Yes, but their cash-on-hand has shrunk dramatically over the last few years. Now that may be an indicator of reason for them not to use their ready cash for an acquisition.

But interest rates have also risen, and borrowing money for a big acquisition would be cost prohibitive. They also draw criticism among shareholders for not making better use of their cash reserves.

Their factories in China are fighting a constant war of protest and disruption of late. China itself is becoming more volatile.

I think there may be a sense among some major investors that Apple has a very real need to diversify their potential profit streams.

Maybe they hoard their cash against the coming storm. Or maybe they spend a big chunk of it acquiring a company so large that the acquisition may lift them both, but for that to work, they'd need to acquire a company so solid, no one doubts their future is bright.

2

smokeyjay t1_iy5n5bt wrote

Investors don't mind. There the only big tech company that actually buys back shares, and not to offset stock based compensation. They've always had massive cash reserves.

They also have AR/VR that may come out next year. And there doing the apple car thing as well. They've been diversifying away from hardware and doing more subscriptions and tying customers into their ecosystem.

I always thought Apple should buy Peloton if they could get it for 2 billion. I see a lot of synergy with the bike, apple watch, air pods, apple music, and apple subscription. The bike is basically an ipad attached to a bike anyways.

5

DaveShadow t1_iy659zq wrote

I presume this is why they’ve been linked with Manchester United this week too.

2