Should Apple Buy Tesla, Record Labels And Every Other Company Investors Desire?

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Apple Inc.AAPL
has been rumored to be interested in acquiring a wide array of companies, including
automakers
, crowdsourced
mapping startups
and
social networking app developers
. More often than not, these rumors are false. For every
unlikely deal
that actually comes true, there are several that never materialize. Apple was recently rumored to acquire
Big Machine
, Taylor Swift's record label. The deal (which Apple reportedly denied) was said to be worth $250 million. "You can never completely rule out something like that," Sean Udall, CIO of Quantum Trading Strategies and author of The TechStrat Report, told Benzinga. "They want every label conceivable to try to use Apple devices and products and services and streaming, right? It's one of these touchy things. I think they'd have to be pretty careful. Could they become a specialty label and not harm these relationships with labels? Yes, it's possible." Udall noted that Apple defied the odds when it started producing its own semiconductor chips. "I kind of worried about that for a while," he said. "But you know what? They still have plenty of other semiconductor companies that want to do business with them." That said, Udall believes the record label rumor is a "a low probability deal."
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Related Link: Apple's 74.5 Million iPhone Sales Provide A 'Screaming Headline,' Everything Else Is Gravy

Apple's iTesla

Apple was once rumored to be interested in acquiring
Tesla Motors IncTSLA
. Regarding that rumor -- which has lived on in
opinion pieces
and a number of
related rumors
-- Udal said there is simply "no reason" for Apple to buy Tesla. "But they could do all sorts of partnerships," said Udall. "I'm almost positive Apple is a significant backer of Tesla's battery project. I think they partner with them, they do deals with them, they figure out how to put software in the cars. I think they might help with driverless car technology. Who knows, they might even have an option to buy the battery division if something bad happens to Tesla. That would be something they could do, and that would be good technology to buy." Udall also recalled a time when some investors wanted Apple to replace CEO Tim Cook with Tesla CEO Elon Musk. "How dumb does all that look now?" Udall questioned. "That just looks ludicrous. I was a huge advocate of not firing Tim Cook." He's also against the
idea
that
Twitter IncTWTR
CEO Dick Costolo should be fired. "Whenever that talk starts coming up generally, especially when a company is delivering, it's almost always a good tell," said Udall. "It tells you people are negative on the company, it tells you it's a good time to buy the company. It's a good tell for extreme negative sentiment. And that's usually all that it is."

'Huge Player In Connected Car'

If nothing else, Udall believes that Apple will be a part of future automobile technology. "Apple is going to be a huge player in the connected car," he said. "When you're talking about software embedded in cars, I think Apple is going to be monstrous in that space. Does that mean they [will] have driverless cars? I don't know." Lastly, Udall said that owning a record label is "sort of akin to them getting into the development of driverless cars." "It could happen but I'd be surprised if they did it," he said. Disclosure:
At the time of this writing, Louis Bedigian had no position in the equities mentioned in this report.
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Posted In: TechAppleSean UdallTaylor SwiftTesla
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