Apple Told To Buy Disney After Stock Tanks?
Analysts are suggesting that Apple who was last night slapped with a $2 billion EU fine should step in now and buy Disney after the giant’s entertainment stock crashed by one third last week.
Apple who is desperate to be a content player has the cash to buy the Mouse Hose after A$139 Billion was wiped off the value of the global Company who recently launched Disney+ in Australia.
Rosenblatt Securities analyst Bernie McTernan is calling on Apple to pounce, he believes Disney’s new streaming service, Disney+, could bolster Apple’s attempts to be a key player in the video streaming market up alongside Netflix.
“Disney+ could solve Apple’s content problem as we believe Apple TV+ is off to a relatively slow start,” he said. “We believe those with long-time horizons, like mega-cap companies with large cash balances and whose equity outperformed Disney over the last three weeks, like Apple, could take advantage of the volatility,” McTernan said, offering that Disney’s market capitalization last week was approximately A$270 billion, while Apple has about A$175 billion in cash and securities.
“The upside from acquiring Disney would be securing their content/streaming strategy and potential synergies from adding the emerging Disney ecosystem to the iOS platform,” he added.
Analysts predict that Disney’s problems driven by the closure of their theme parks due to the Coronavirus.
In 2019, revenue from theme parks accounted for nearly 27 percent of Disney’s total revenue of A$40 billion.
It’s now tipped that Disney could lose about A$2.3 billion in earnings and A$2.5 billion in revenue for all of April.
One bright spot for Disney is its nascent streaming service, Disney+, which launched on Nov. 12. At launch, Disney said it signed up 26.5 million subscribers to Disney+ by the end of 2019 and 28.6 million as of Feb. 3.
Apple, which launched Apple TV+ on Nov. 1, hasn’t released any subscriber numbers, but analysts have estimated that it’s attracted half as many subscribers as Disney+, even though Apple is giving its product away free for the first year — and charging only US$4.99 after that.
Disney+, by contrast, costs US$6.99 a month.