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Don’t Buy Apple Stock Hoping for a Netflix Acquisition

Buybacks, dividend, and acquisitions, all of which will benefit Apple stock if deployed correctly. They paid out nearly $4 billion in dividends in the December quarter, and that number will only go up over time. But not much has happened on the acquisition front. As such, everyone thinks that the next big move for Apple, given its huge balance sheet and recent struggles from stalling out growth in the iPhone business, is a big acquisition. When it comes M&A talk, one of the companies that keeps getting thrown around as an Apple acquisition target is Netflix (NASDAQ:NFLX). The two business models are traditionally orthogonal. But, in an IoT dominated world where everything is becoming increasingly connected, a marriage of these two businesses actually makes a ton of sense, and could provide a big tailwind for Apple stock. Indeed, a few weeks ago, I wrote “[t]he most obvious M&A use of Apple’s huge net cash balance is an all-in acquisition” of Netflix.

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