Mincey friends and family come in a variety of political dispositions. For the few who voted for the country’s 44th president, I point out that nearly six of 10 people voted against him. And the odds were much against that event.
Odds are interesting but made more so depending upon perspective. Donald Trump defied the odds but nearly 60-percent of the electorate did not want him to be president. Likewise, Apple has enough money to buy France. Or, Ford. Or, Tesla, Adobe, or IBM. But what are the odds?
The odds are not good that Apple will buy any company so significant. So says investment bank Citi which highlighted seven merger and acquisition targets that Apple could afford, could buy, but based on the odds given, probably won’t.
The odds are that Apple won’t buy anyone. Or, at least, not buy any company as significant as Disney, Tesla, or Netflix, among others.
Citi’s list has a few dreams, a few question marks, and a few ‘no way, Jose’ options.
- Netflix: 40%
- Disney: 25%
- Electronic Arts: 10%
- Activision: 10%
- Take-Two: 10%
- Tesla: 5%
- Hulu: 0%
Put into perspective, odds are that Apple won’t buy any of those companies. A 60-percent chance that Apple will not buy Netflix, but there’s a 75-percent chance the iPhone maker will not buy Disney.
See how that goes?
Take-Two, Activision, and Electronic Arts have a 90-percent chance of not being acquired by Apple. That’s only a 10-percent difference from Jeffrey Mincey being hired as Apple’s CEO.
Netflix and Disney both have what Apple does not. Content. Sony upended an industry by getting into content to help sell its hardware. That hasn’t worked out well in recent years, but you get the idea. Apple needs content to compete against Amazon.
The odds work in other directions, too. Tesla is a high flying stock worth more than General Motors. As colleague Wil Gomez said, “Apple Should Have Bought Tesla.” It didn’t and now the odds are against it, 20-1. But Tesla needs cash for capital expenses to grow. Apple has cash and might have $100-billion more if the repatriation plan works in Congress. Why? Because Apple needs self-driving vehicle innovation. Tesla has that. Apple needs that. Tesla needs money. Apple has that.
Citi’s analysts think there’s a 20-1 long shot that Apple would buy up Tesla but more than a 1-in-3 chance it will buy Netflix. Oddly, only a 1-in-4 chance Apple would purchase Disney, which actually makes content. And money.
Just remember the odds. The odds are better that Apple won’t buy any company of significance.