Analysts have speculated for years about what Apple Inc. AAPL 0.23% could choose to do with its massive $246.1 billion cash balance. In a new report, Baird analyst William Power suggests some aggressive and surprising M&A opportunities that may actually be realistic for Apple.
Power suggests Tesla Inc TSLA 0.01%, Netflix, Inc. NFLX 0.47% and Walt Disney Co DIS 0.21% as three potentially market-rattling buyout options for Apple.
Power believes the combo of Apple’s balance sheet and Tesla’s technology could make Apple a dangerous competitor in the auto industry.
Netflix’s original content library and distribution network would put Apple immediately in the mix as the top streaming video company in the world.
Finally, a buyout of Disney would provide several advantages, including new content, OTT technology, revenue diversification and co-branding potential.
Word Of Caution
Of course, before traders get too excited about any of these three potential blockbuster deals, Power noted he believes Apple will most likely take a much more boring approach.
“Though acquisitions might help here, we believe investing organically in content, innovative features and new services should continue to improve the company’s long-term positioning,” Power explained.
In addition, he predicts Apple will use its cash to significantly boost its buybacks sometime in early 2017.
Baird names…
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