Skip to main content

Market Overview

5 Reasons Apple Won't Buy Disney

Share:
5 Reasons Apple Won't Buy Disney

Walt Disney Co (NYSE: DIS) shares were up 0.7 percent on Thursday following a new report from RBC Capital discussing all the reasons why an Apple Inc. (NASDAQ: AAPL) buyout of Disney would make sense. While Disney investors would certainly love a buyout at a premium to market price, investors should make sure not to overlook the caveats RBC provided in its note as well.

Analyst Amit Daryanani is far from convinced a deal will happen.

“We see a confluence of events that make an acquisition of DIS a ‘greater than 0 percent’ probability event (while odds are low),” Daryanani said.

5 Arguments Against The Buy

In addition to his arguments in favor of a merger, he also included a list of five things naysayers could point to as evidence that Apple will never buy Disney:

    1. Apple’s largest past buyout has been Beats Inc at only $2.2 billion. Disney’s market cap is currently $180 billion.
    2. A Disney buyout would be a departure from Apple’s recent business strategy.
    3. A Disney buyout would conflict with Apple’s long-term goal of being a one-stop shop for all digital media content (not just Disney’s).
    4. There would be integration risk.
    5. A Disney buyout might signal to investors that the iPhone business is reaching its maturity.

Rumors of potential mega-mergers make for fun, attention-grabbing headlines. But while these types of deals certainly occur from time to time, traders should keep their expectations in check and understand that a Disney buyout is a long-shot at best.

Related Links:

The Case For Why Apple Should Buy Disney

Get Ready For Retailer Execs To Blame Easter For Poor Earnings
_________
Image Credit: By Bryan Gosline - Flickr: Snow White!, CC BY-SA 2.0, via Wikimedia Commons

Latest Ratings for AAPL

DateFirmActionFromTo
Feb 2021RBC CapitalAssumesOutperform
Jan 2021DA DavidsonMaintainsBuy
Jan 2021Deutsche BankMaintainsBuy

View More Analyst Ratings for AAPL
View the Latest Analyst Ratings

 

Related Articles (AAPL + DIS)

View Comments and Join the Discussion!

Posted-In: Amit Daryanani RBC CapitalAnalyst Color M&A News Rumors Analyst Ratings Best of Benzinga

Latest Ratings

StockFirmActionPT
PBTruist SecuritiesMaintains88.0
CFRTruist SecuritiesMaintains111.0
FANGTruist SecuritiesMaintains105.0
NPOOppenheimerMaintains95.0
SBNYCredit SuisseMaintains250.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
SPAC
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at vipaccounts@benzinga.com