Apple Targets Buying Tesla with Huge Cash Reserve of $250 Billion


Apple targets buying Tesla with its cash hoard of $250 billion and is one of the seven companies reportedly targetted for acquisition

Apple seems to be targetting the purchase of some of the high-profile American multinational companies. The list containing seven possible companies include Netflix, Walt Disney and Tesla. It is to expand the tech giant’s wings and leverage the $250 billion it currently has to good effect according to Citigroup.

In a note to clients, an analyst for Citigroup stated that Apple will have $220 billion for acquiring other companies or buybacks as 90 percent of its total cash resides outside the US and only the remaining 10 percent is for repatriation tax. The huge cash is perceived to give Apple a wider flexibility in terms of takeovers or outright purchases.

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Moreover, the new tax blueprint revealed in April under the guidance of US President Donald Trump enables multinationals to bring overseas profits at a tax rate of only 10 percent rather than the existing norms demanding 35 percent tax. Several years ago, the talks of Apple taking over Tesla did emerge but it failed to materialise.

It is expected that Apple could easily get the job done with $51 billion market cap but rumours just stay the way they actually are. Tesla’s charismatic CEO Elon Musk predicts that Tesla could exceed Apple with $750 billion valuation within the next ten years and if that’s the case he won’t be giving in on the ownership of the electric car manufacturer.

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The other potential acquisitions seem to be in the frame for Apple are video game developers Activision Blizzard, Electronic Arts and Take Two Interactive Software alongside video streaming service provider Hulu. The targeted companies are said to be evaluated based on the major criteria like global scale, non-strategic assets, transaction size, strategic fit and impact on Apple’s share price. It is worth noting that Apple boosted its capital return program, share buyback program and raised quarterly dividend due to pressure from shareholders.