Wall Street Taking Odds On Apple Buying Netflix

A year ago, no one thought that Disney would buy Fox. Well, except for one guy. Bank giants Citi started off 2017 by laying down 30% odds that the mouse house would scoop up Rupert Murdoch‘s company. Whoever took those odds walked away with a nice bundle of change. Now, they’re making another prediction.

Citi analysts Jim Suva and Asiya Merchant are saying that there’s a 40% chance of Apple buying Netflix, with Donald Trump‘s corporate tax cuts making the path to that kind of deal that much easier. Basically, it’ll open the door to Apple being able to spend their previously unavailable $252 billion in offshore cash, and a big media buy could be the path they decide to go down. The prediction does have some logic behind it.

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Apple is very late to the streaming game, and only just starting to ramp up their slate of original prestige productions, and hiring key executives to oversee that programming. While they do have the iTunes store to bring their content directly to customers, purchasing Netflix would give immediately given them over 100 million subscribers around the globe. Meanwhile, for all their success, Netflix is still operating at a debt (which can be fairly normal for tech companies), a situation that likely won’t change anytime soon as they get ready to spend $8 billion in content this year alone. it might be nice to have someone act as a cushion. Moreover, being absorbed by Apple will allow Netflix to have a powerful ally against the Disney/Fox mega-monster, who are planning their own streaming platform.

The other side of the coin is that Apple tends to keep their technology inside their walled hardware or software garden, which makes a play for Netflix somewhat counterintuitive (ie. are they ready to give support to PC users or those using non-Apple devices to access the service?). And maybe Netflix simply doesn’t want to sell. There had been plenty of rumors for a long time that Disney was going to buy them up, but those didn’t pan out. Netflix is the current envy of the industry, and as long as they stay successful, their value will keep skyrocketing (even if they operate at a loss). So why sell now, when they haven’t even reached the peak?

Anyway, lots to consider and discuss, so take it to the comments section. [Business Insider]