The undisputed king of streaming video-on-demand, Netflix is likely an attractive fruit for any company with deep enough pockets. According to some analysts with financial company Citi, Apple may have set its sights on the ripe streaming service.
As cited in Gadgets 360 and elsewhere, Citi analysts Jim Suva and Asiya Merchant believe Apple could be eyeing a Netflix purchase due to the new tax changes passed by Congress and signed into law by President Trump. It lowers the U.S. corporate tax rate from a maximum of 35% to 21% (just below the international average of 22.9%). The new tax law also lets companies repatriate their profits to the U.S. for a low, one-time tax.
Apple is well known for keeping the majority of its corporate profits outside of U.S. shores. The company previously took advantage of a sweetheart deal from Ireland. However, a tax crackdown in that country led the tech giant to move its profits to the small island nation of Jersey.
According to the Citi analysts, “With over 90 percent of its cash sitting overseas, a one-time 10 percent repatriation tax would give Apple $220 billion.” That money could very easily go toward purchasing other companies, Netflix included. The tax windfall happens as the rumors about Apple starting its own streaming service ramp up. A Netflix purchase would potentially be a lucrative use of the company’s repatriated cash.
With an estimated value of more than $80 billion, Netflix would be an expensive purchase, but undoubtedly one Apple could easily afford.