Journal tomhudson's Journal: Apple to buy Sony 17
Why it makes sense:
- Apple is sitting on piles of cash.
- Sony, at 26 billion, is down by 80% from where it was a decade ago
Apple has $23 billion in cash. Sony has $20 billion in cash - meaning that Apple could offer a 50% premium ($39 billion) and still end up "out of pocket" only $19 billion - or if they offered 50% stock, 50% cash, end up cash-neutral - buying Sony for $20 billion of newly-printed Apple stock and $20 billion of Apple cash to get $20 billion of Sony cash.
Also, Sony generates $81 billion a year revenue, which is more than Apples $51 billion, so the cash flow gets a big boost as well.
Naah... (Score:2)
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Exactly. Just look at the game shows and soap operas they own. Plus stuff like Evercrack. It would also give Apple the ability to sell to governments, businesses, etc., that want a mixed-bag computing platform, with some Mac and some Wintel - shove Sony VAIOs at them.
Both divisions (Apple and Sony) benefit ..
To make it work Apple has to spin off the content (Score:1)
There's no way Apple's media partners in iTunes will tolerate Apple owning Sony's media catalog and movie properties. Too much threat of self-dealing. Those guys are paranoid - they drink a lot of Coke. It's a wonder Steve could drive a deal with them at all for DRM free MP3 tracks - I would speculate Jobs has a very interesting private video collection that we'll never see.
The media arms would have to be sold off - Disneyfiable franchises to Disney, probably the rest to Comcast. That's OK for the deal
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Sony: Music [sonymusic.com], Movies and TV shows [sonypictures.com] (Dr. Oz Show, Jeopardy, Wheel of Fortune, Young and the Restless, Days of our Lives). Games (Playstation) Internet gaming [soe.com] (Everquest, etc), a very nice back library of titles ...
That's Job's model - high development costs, then cash in on the sales. Computers, movies, games, they all have the same cash-flow profile.
In terms of market penetration, this would be big. Look at Sony India TV [setindia.com] ...
And it would be convenient to be able to tout the VAIO as "the" WinTel to buy if
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Sony: Music, Movies and TV shows (Dr. Oz Show, Jeopardy, Wheel of Fortune, Young and the Restless, Days of our Lives)
Isn't Apple already able to make money off of those by re-selling them through iTunes? Why invest in the production when you can make money as the reseller instead?
Games (Playstation) Internet gaming (Everquest, etc), a very nice back library of titles ...
Those would be somewhat-new markets for Apple. The iPhone can do some multiplayer gaming, IIRC. And I'm not sure that Apple would really want the playstation, which is another high-cost, low-margin development deal.
In terms of market penetration, this would be big. Look at Sony India TV ...
I could be very wrong, but I suspect Apple would rather not get involved in that kind of production. I think an argument could
How about Disney? (Score:2)
While Disney has a much larger market cap ($61B+), Steve Jobs is a Disney Board member and already owns 7% of the stock.
Disney would be much more of a pure content play than Sony too.
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I think not (Score:1)
Sony is Japanese. Not going to happen for that reason alone.
A company with 20 billion in cash being valued at only 26 billion also shows how messed up (or at least bizzare) the stock market is.
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One other factor not noted - Sony has $13 billion in debt, Apple? None.
There's nothing to stop it - it's not like there's any one big block of Sony shareholders [yahoo.com]:
Held by Insiders: 6.90%
Held by Institutions: 8.70%
Apple [slashdot.org]?
0.65% Held by Institutions: 72.50% 50% ownership would be very easy to obtain by public offer of 1 AAPL share for 10 SNE share plus some cash.
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And the Government of Japan would find some reason to not let the deal go through and that would be all she wrote.
Crunching the idea... (Score:1)
Apple is a media and consumer electronics company like Sony is, so it's a good product fit. One of the huge disadvantages that Sony has in monetizing their assets is that they "just don't get" other cultures. They signed Mariah Carey to a 3-movie deal for $50M, and then paid her the balance after "Glitter" to avoid having to make the other two movies. No other CEO gets American culture like Steve Jobs, so the ability to rebuild Sony into a more powerful driver of shareholder wealth is a big draw. After h
Better idea (Score:2)
Amazon.
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The cost is too high ($48.6B book value - almost 2x Sony), the cash flow is too low ($26.7B as opposed to over $80 B for Sony), profit ($5B gross, $1B net) has always been awful , profit margins are terrible (under 4%) and it doesn't "make" anything, so margins will never go higher, and it can be attacked by anyone else providing the same service.