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That Apple-Disney Acquisition Rumor is Probably Nonsense

The rumored buyout would consume almost all of Apple’s cash reserves.

Here we go again. Every once in a while, some analyst gets bored I guess and decides to entertain themselves by tossing an Apple-Disney buyout rumor into the water and seeing how many bites they get. This week saw the latest fishing trip, and considering the numbers involved, it’s almost certainly just as off-base as the last one.

The source of the rumor is seriously as close to “some dude” as it gets. Said dude is from RBC Capital Markets, who said something along the lines of “hey wouldn’t it be cool if Apple bought Disney?,” something that is now news. To be clear, the report (as cited in Business Insider) doesn’t actually source insider info, but is pure speculation.

The speculation is grounded in the idea that the deal would “make sense” for Apple. There’s logic to it — while outrageously valuable, Apple is dangerously over-reliant on iPhone sales, and could be headed for rough waters if iPhone sales continue to taper off (or worse, decline). Having Disney would mean having Star Wars, Marvel, Jim Henson, Pixar (full circle!), ESPN, and ABC. Revenue streams would maybe not be a problem after having those things.

The ridiculous part? The projected price tag is around $237 billion. As rich as Apple is, even that is blisteringly high. A report from earlier this year pegs Apple’s cash reserves at $246.09 billion, much of which is overseas. Even if Apple could navigate the tax pitfalls involved in getting that money back to the United States, we’d be talking about Apple putting almost all of its chips on the table. It’d be like having the most money at a poker table and going all-in with a pretty good hand — sure, you’ll probably win, but why risk such a massive lead all at once?

The idea of Apple depleting its record cash reserves down to almost nothing on a single acquisition (even one as sure-seeming as Disney) beggars belief, especially considering Apple’s largest acquisition to date was Beats for $3 billion — they haven’t made the kind of splashy deals we’ve seen from the likes of Facebook and Microsoft.

But, who knows? It would make the shareholders happy, and considering there’s been no serious roadblocks thrown in front of the AT&T-Time Warner or Verizon-Yahoo acquisitions, it seems regulators are perfectly willing to allow technology companies to swallow up media companies to become corporate mega-giants. It seems we’re destined for a future of a handful of mega-corporations running everything anyway, so why not hasten things?