As Trump Passed Corporate Tax Cut, There Is A 40% Chance That Apple Could Acquire Netflix

According to Citi analysts Jim Suva and Asiya Merchant, as President Trump passed the corporate tax deal, so there is a 40% chance that Apple will acquire Netflix. Due to the sharp decline in the tax cut, Apple maybe repatriates overseas cash back to the United States at a lower price. so the company will have more funds for the acquisition of new startups.

Apple now owns about $252 billion in cash, most of which are overseas, previously it has been unable to bring back to the United States. Both two analysts cited the possibility of becoming the object of Apple's acquisition, of which Netflix as the company Apple would be most likely to buy.

For years, Apple worked hard to provide users with compelling TV or movie offerings. its iTunes used to have a huge impact on Cupertino, but users are now moving to streaming services such as Netflix, Amazon or Hulu where users can see their favorite TV shows. So we've seen Apple's growing of interest in original content lately, suggesting that Apple is actively planning big moves.

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.

According to CNBC's Jim Cramer, Netflix should be worth way more than its $80 billion-plus market value. In other words, the online stream services should probably be worth way more than its market cap value. And that means Apple would need only a third of that cash to buy Netflix.

Via Business Insider, Image Credit iPhone Hacks

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