Apple Announces $3 Billion Beats Acquisition, Jimmy Iovine and Dr. Dre Joining the Company

[Arndroid]

well it is a smaller company. they just paid way to much.

gosh, i just hope Apple knows what they are doing. I hope this leads to a hype in the stocks so that I can sell mine.

How much is beats worth as a financial investment?

What criteria are you using to make your valuation.

Since you said they paid too much you must have arrived at a number that would not have been too much. Showing your work would be helpful.

I will show mine. Beats makes anywhere between 150 million and 300 million a year. This puts this valuation at a 10-20x multiple. This is all in the range of a sound financial investment. Besides that Beats has been growing at an astronomical rate, which makes those multiples very conservative.

Now you go...

 

[Braniff747SP]

Unfortunate that they didn't buy someone with any idea how to, you know, make headphones.

 

[nick42983]

This is the first time I think the cliche is actually true. I don't think this would have happened under Jobs. He would have insisted that their culture is irreproachable and they need not import another company to make a positive culture shift. I wouldn't say I admired that arrogance, but it was always entertaining to see the confident proclamation that they make the best products, no questions asked.

I don't think this is about the culture of the company. I think that Hollywood/LA (music, tv and movies) just didn't want to play ball with Apple. They needed to buy someone who'd give them access to the content creators. No matter how creative Apple's technology, they need to get the entertainment content elsewhere. Jobs apparently "cracked the code" to how to do TV right, technologically perhaps, but without the content it's not worth much. I think even he would have come to realize this. For all we know his intransigence on how much to pay record companies is what soured them to working with Apple in the first place.

 

[rgraf77]

I can't wait to see "Dr." Dre blow all his money.

Well he has been filthy rich for many many years without blowing his money.

 

[AdonisSMU]

Who knew MR had racists swarming like this. I would think this was stormfront..

Most on here wont catch that reference....but LOL!

 

[Benjamins]

I don't think this is about the culture of the company. I think that Hollywood/LA (music, tv and movies) just didn't want to play ball with Apple. They needed to buy someone who'd give them access to the content creators. No matter how creative Apple's technology, they need to get the entertainment content elsewhere. Jobs apparently "cracked the code" to how to do TV right, technologically perhaps, but without the content it's not worth much. I think even he would have come to realize this. For all we know his intransigence on how much to pay record companies is what soured them to working with Apple in the first place.

like I said, you can give Tom Hanks, Angelina Jolie, Leonardo Dicaprio each of them 1 billion to negotiate TV/Movie deals on behalf of Apple.

 

[carmenodie]

The slow but steady decline of Apple as a brand, which began with the loss of Steve Jobs, and has gained momenteum since, now reaches warp speed. With all due respect, **** Tim Cook and the current brain trust. I think I will look elsewhere from here on. The manqué is bankrupt. The sense of specialness is gone. The hell with all this.

You sound worse than my five year old sister during a temper tantrum!!!!
All this talk yet you don't mention that Apple has a cash hoard well over 130 billion overseas. LOL!
Apple is a public company that is TOLD what to do by their investors. I wish your were a fly on the wall during investor's meetings.
But as a free to choose consumer take your a** someplace else.
And I work in the hotel business and I have seen just about every culture wearing beats. It is phenomenon!!!! Russian models, young boys studying to be rabbis, investment bankers etc. You name them and they are wearing it.
Apple scored a touch down and now they will transform that buy into something you ain't ever seen.

 

[mejsric]

iHaters gonna hate as usual.

Thanks for the concerns.

Cook promised new features for Beats that will "blow your mind" as well as "products you haven't thought of yet"

Cant wait......

 

[Squeak825]

Dre is already worth and estimated $80million. Add the money from the beats deal and its way over $1billion. You sound like a hater anyway....

$80M + (.25 * $3B) < $1B

Plus he will have to pay close to 40% in taxes on his $750M stake.

($3B * .25 * .6) + $80M = $530M cash net worth.

 

[Imory]

Their streaming service is like a better Spotify.

Interesting. Care to elaborate on that?

 

[bluespark]

Interesting picture is of tim cook and eddy cue... Clearly these guys will be working with eddy on services... Notice the absence of Johnny Ive? Here's hoping these guys stay far away from product design.

What a strange post. Of course they will be working on services and not design. Why on earth would Jony Ive be in this picture?

 

[neuropsychguy]

ugh....I don't see this being a good thing. These are not the people Apple should be associating with. They are part of the music industry. Apple shouldn't be buying into the industry, they should be tearing the industry apart.

Didn't Apple buy into the industry with the iTunes Store (especially conceding and allowing music to be DRM-infested early on)? Their doing so made a lot of progress with the music industry. Sometimes it's better to change something from the inside out.

 

[Zlotych]

Regardless of what they do with Beats, they just got rid of one of the fastest growing names in consumer electronics. If they get nothing, they took out a competitor, which may be all they are looking for.

 

[Nalmond92]

May this comment forever enshrine, that I believe that this aquisition was a good one! I therefore am allowed complete bragging rights to those who shunned immediately

 

[superman23]

I am really not sure what to make of this, their headphones were not exactly known for their quality, and to be honest I actually only know the name Dr. Dre, but have not the slighted idea who he actually is. I like Tim, so I hope he knows what he is doing. To me the marriage between Apple and Hip Hop seems odd, but maybe I am just ignorant...

they paid $3 billion because millions of idiots think Beats make the best headphones. thats all that matters

 

[Pieira]

Isn't Apple starting to feel like a company motivated primarily by the bottom line financial number? Doesn't the creation of high quality products feel secondary to ultimate profit? I mean, think about it. Meetings with Carl Icahn, institution of a dividend, stock splits, large billion dollar acquisitions of companies that seem to go against the "culture" already created with the brand.. That is what makes me scared about all of this.

3 billion dollars for a company that is actually profitable is a drop in the bucket to Apple. I have no doubt that Apple is going to make its money back on this acquisition. But it is the other stuff that is making me nervous. I really hope that Tim Cook is not fixated by the bottom line and is committed to continuing to cultivate a great "brand" that does not cater to any outside interests. That was the genius Steve Jobs tapped into. That is what made Apple different. The further away Apple gets away from that vision will be the beginning of eventual significant decline IMO.

This is it for me.

I don't care if this is a good deal for Apple or not. Apple used to be a company I wanted to follow because it was exciting to see what innovations they would come up with in hardware or software, if they made an acquisition it would be an interesting new tech or a creative idea.

Buying Beats is of no interest to me, I'm don't care about music licensing.

Google increasingly feels like a company I want to follow. I know Apple still makes great products, I'm just losing interest and for me this is pretty sad.

 

[iCore24]

Honestly I'm pretty nervous. I think that's why everyone is rageing. When techys hear Beats, they cringe knowing there awful price to value ratio is way towards price. That maybe having that kind of company will blend with Apple and soon in the future, Apples quality will diminish.

I know it's a little sevear, but it's what comes on my head thinking of this acquisition.

But after taking time to think about it, I know that that is not going to happen. I say let's wait and see what they do with Beats...

 

[maxwelltech]

Geez, I was really hoping that this deal fell through. Beats is totally not worth buying except maybe for their music subscription service, and even then they can create their own service for much less amount of money. Oh well, at least these two companies share some common traits

 

[D.T.]

No, that's the low bitrate MP3s that you've downloaded illegally.

Dre is already worth and estimated $80million. Add the money from the beats deal and its way over $1billion. You sound like a hater anyway....

According to Wikipedia:

In 2014, Dr. Dre was ranked as the second richest figure in the American hip hop scene by Forbes with a net worth of $550 million.

Then this in the context of the May 8th rumor:

...assuming that he still holds at least 15% ownership in the company

And of course, todays announcement:

On May 28, Apple confirmed its intent to acquire Beats Electronics for $3 billion; the majority of the acquisition will be paid in cash, but the remaining $400 million will be in Apple stock.

So _assuming_ per the Wiki that he does in fact own 15%, and that the cash portion of the deal is $2.6B ($3B - $400M), that 15% would be worth $390M in cash, and another $60M in stock.

So 390 + 60 + 550 = $1B

 

[tbrand7]

There’s far too many product leaks of iPhones lately. Dr. Dre will work within the supply chain to make sure those leaks stop because he’s “got the hollow points for the snitches”.

 

[6EQUJ5]

Tim Cook's letter to Apple staff is so corny and kiss ass and is indicative of what's wrong with Corporate America! Way to betray Steve Jobs and Think Diffferent Tim! I think Cook proved his the Browett hire wasn't a fluke — he truly is a terrible judge of character and is nearly as culturally and aesthetically tone deaf as Steve Balmer!

 

[DavidG328]

So what does this mean for Detox?

 

[Boomish69]

Tim C is a fool.. what joke this is, Dr Dre laughing all the way to the bank..Apple software has already hit rock bottom now so will it's hardware. see ya Apple you suckers.

 

[D.T.]

Why on earth would Jony Ive be in this picture?

Ummm, because he’s dreamy?

 

[Benjamins]

There’s far too many product leaks of iPhones lately. Dr. Dre will work within the supply chain to make sure those leaks stop because he’s “got the hollow points for the snitches”.

now wouldn't that be funny.