As the Heisenberg crowd is acutely aware, we aren’t much for individual stock research.
We’re macro folks. We think about things at the asset class level.
That said, occasionally something comes along that catches our eye. But even then we won’t post it. Because again, we don’t generally give a shit.
But, when something strikes us as either i) particularly absurd or ii) just plain old funny, we’ll post it.
On Friday, we found something that meets both of those criteria.
Here’s Citi on how Steve Jobs will posthumously take over the world by acquiring Netflix or Tesla or maybe Disney.
There are even probabilities assigned.
Oh, and there’s a survey.
Slowing Growth and Too Much Cash
As Apple has become larger, the firm’s sales and EPS growth have slowed. But, in tandem, the firm has too much cash – nearly $250 billion – growing at $50 billion a year. This is a good problem to have.
Tax Reform May be a Catalyst
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.
We Identified Seven Potential M&A Targets
We identified a handful of potential M&A targets. Three are media firms: Netflix, Disney and Hulu. Three are video game developers: Activision, Electronic Arts and Take-Two. And, one is an auto maker: Tesla. Each target confers some strategic benefit to Apple.
We’re going to go with “other” and write in “the moon.”