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MGM Held Talks With Apple and Netflix to Gauge Interest in Acquisition
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Also, "nominated" is selling them a bit short, I think. IIRC, they won two awards for TMS.
We’ll see
Replacing the 55” monitor from 15 years ago with a 65” OLED LG, but keeping the projector 1080p for now (that thing cost a heck of a lot at the time, so we’ll see whether the beauty of 4K compels me to swap that too).
Makes all the sense in the world. If Apple really wants to play in this space ... the do not have the luxury of inching their way along. Too much competition with more to come (HBOMax in the spring, Peacock full rollout in the summer). MGM would make Apple a player immediately. Nice catalog along with some strong originals coming from Epix (Get Shorty, Berlin Station, Deep State, Godfather of Harlem, Pennyworth & Perpetual Grace). They have another 9 months or so before those trying it out via the free year with an Apple device purchase get to the point where they have to pay for it.
We’ll see
Replacing the 55” monitor from 15 years ago with a 65” OLED LG, but keeping the projector 1080p for now (that thing cost a heck of a lot at the time, so we’ll see whether the beauty of 4K compels me to swap that too).
Bingo! I just set up my 65" LG C9 OLED a month ago (to replace 13 year old 42" plasma), and with 4K content from Disney, Netflix, and Prime apps, image is draw dropping. Like going from a Model T to a Ferrari. Enjoy.....
If an acquisition were to take place, it would drastically improve the Apple TV+ library. Not saying Apple should purchase MGM, but if Apple didn't give away a free year of ATV+ when I purchased my 11 Pro, I don't think I'd subscribe to the service.
You generally buy your shares back when you are holding on to way more excess cash than you can reasonably use (for running the business / investing in future growth opportunities).
For one, holding on to excess cash earns you no interest.
So share buyback is a way of returning excess cash to shareholders (by way of higher share prices), signal to the marketplace that you are confident in your own company, reduce agency problems found with management having access to too much cash (they might do something reckless, like actually contemplating an acquisition of Netflix or even Disney if they felt pressured to spend the excess cash), as well as allow for changes to the company’s ownership structure (investors who want to cash out will have to sell their shares back to the company).
Conversely, while paying out dividends also returns excess cash to the company, it does little to send a positive signal to the market.
Likewise, it doesn’t make much sense to just keep pumping the money into R&D either because past a certain point, more money may not result in better products any quicker. Apple’s business model is very capex light. In addition, there is no reason to lower prices when Apple has shown that it is not exactly a detriment to people buying their products, so why leave good money on the table?
The summary is that Apple is generating more money than they can reasonably spend (about $60 billion in excess cash every year), so share buybacks is the most obvious way of dealing with that “problem” in the short run.
Yeah, mine is a C9 too. My old set picked the perfect time to die - just in time for the post-CES price drop
this.
no different than how Apple Music, Spotify, etc changed music ownership forever. Who wants to carry all that data around, especially since resolution keeps improving. I have no desire to watch any of the thousands of standard def DVD's I used to hoard...when I can watch them streaming in 4k, and tomorrow they are magically 8k.
A variety of reasons. It could be to return cash to investors instead of paying a dividend, think the stock is undervalued and thus buying it cheaply, or to improve financial results such as EPS or ROA. If the company is in good shape the stock prices increases and executives and other stockholders get a bump in the value of their holdings.
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They still can sell on the open market if the offer price range is too low.
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I logged in just to like your post and reply.
What did you think of SGU? I was so disappointed when it was canceled.
I know you weren’t asking me, but I enjoyed SGU, I liked all 3 series. They all hold their own to me.
I thought they did a decent and fitting last episode for the time they had, and it was obvious the writers wanted to leave the door open. There’s been some interesting fan fiction written to continue the story. obviously not cannon but still interesting.
I still wish STA would have gotten the movie that was supposed to be made too.
the world of stargate has so much potential I’d love to see someone doing more quality content in it.
Apple should buy Baskin Robbins so they can have ice cream in Apple Stores.
Netflix makes no sense. Other than a few programs they developed, all their stuff is from others they pay to stream. Apple, if they want, could simply negotiate deals to stream content now on Netflix without buying Netflix. They could even negotiate deals with companies like Disney to add them as an Apple TV+ bundle and share some revenue in exchange or access to their content; if they wanted to try and go that route. I suspect more content owners will pull content form Netflix as the develop their own streams or cut deals with Apple / Amazon for exclusivity.
hmmm... the whole aim of business is to generate as much money as possible, its ironically comic that they are basically saying we are too rich.
Why can't they just keep them in the bank and earn interest on it?
Consistent with my general philosophy relating to equity investing, I'm generally not a fan of public corporations returning capital to shareholders. That said...
For some corporations, there comes a point where they have much more capital than they can foresee ever needing for business purposes. When they reach that point it makes sense to return that excess capital to shareholders. What else would they do with it?
Apple reached that point many years ago. It has more than enough cash flow to fund all of the R&D, and other operating expenses, that it thinks make sense. And It isn't interested in making large acquisitions. Further, if it ever needed funds for unexpected reasons - e.g., if its general philosophy regarding large acquisitions changed and it wanted a lot of cash to buy another large company - it would likely be able to raise the cash it need through, e.g., debt issuance. (Again, that's not something it foresees needing; but even without a large net-cash pile it would have access to lots of funding.)
So, when it makes sense to return capital to investors, the question becomes how to do so. For the most part, the options are dividends and buybacks. I think buybacks are the better option, especially when we're talking about returning large amounts of capital to shareholders. If for no other reason, buybacks give shareholders more flexibility when it comes to the timing of tax liability.
If a corporation thinks its shares are significantly long-term undervalued, then buybacks make great sense. And those within corporations - e.g., board members and executives - are generally well positioned to assess whether those corporations' shares are long-term undervalued.
Stock buybacks don't always turn out well for shareholders. It depends on the circumstances. They can sometimes be used to bolster share prices in the absence of solid underlying performance by the business. But sometimes they turn out very well for shareholders, particularly when they happen while the corporations' shares are significantly undervalued. For good or bad, buybacks tend to concentrate - effectively intensify - future stock price movements. That's what's happened with Apple, to the benefit of its on-going shareholders.
Apple has now bought back nearly 2.5 billion shares at an average price of $130. If is effectively nearly $500 billion ahead on those share buybacks. By that I mean, the effective cost of those buybacks is around $320 billion (taking into account dividend savings and net-interest losses) and those shares would be worth more than $800 billion at the current share price.
Sometimes it isn't clear whether certain buybacks helped a corporation's share price. But in Apple's case it's pretty clear that the buybacks have. To believe that Apple's share price would be as high as it is now, all other things being equal but with Apple not having spent the $300+ billion to buy back those 2.5 billion shares, you'd have to believe that the market would value Apple $800 billion more than it does today (at over $2.2 trillion) - with the difference being that Apple had $320 billion more in net-cash on its books.
I don't think there's any real possibility that would be the case. Assuming the market would value additional net-cash on Apple's books at 1-to-1, giving Apple a market cap $320 billion higher than it is today, its share price would be about $253. This isn't a perfect method for considering the effect of the buybacks on share price, but it does give us an idea of the possible effect of the buybacks on share price - as compared to Apple having continued to hold that cash.
We might also consider the situation this way. If Apple had a need for that cash, it could get it back by issuing and selling new shares. As I indicated before, those 2.5 billion shares - which, if reissued, would leave shareholders at the same dilution they'd have been at without the buybacks - would be worth more than $800 billion at the current share price. Even at an average price of $200 per share, Apple could raise $500 billion - and effectively be nearly $200 billion ahead.
Again, stock buybacks aren't always a great benefit for shareholders. But in Apple's case, I think its buybacks over the last 8 years represent - taking into account their scale - one of the greatest financial moves of all time. Apple has, through its buybacks, created an incredible amount of wealth for its shareholders in addition to the wealth it's created through normal business operations.
I'd make one last point about the idea of returning capital to shareholders. Under most circumstances I don't think it makes sense for a public corporation to return capital to shareholders (other than, perhaps, a small amount through dividends). But that possibility has to be out there, otherwise there wouldn't be much point to equity investment. If there wasn't an expectation that a given corporation might eventually return capital to investors (or be bought, which would represent a return of capital or a potential return of capital through the acquirer), why would anyone pay more for its shares? To sell them to someone else at a higher price, sure. But why would that someone else pay for them? If capital wasn't ever going to be returned, what value would the shares have? Liquidation?