The tax cut paves the way for Apple to bring its massive pile of cash stored in foreign jurisdictions to the United States.
The company would need only 1/3 of that to snap up Netflix.
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".
Apple's answer to this crisis was to invest $1 billion dollars in original video content production, as reported by Wall Street Journal in August 2017.
Even with some star power behind their project, it's unlikely that these scripts will be enough to approach the dominance of other streaming services, hence the Netflix merger remains a distinct possibility. As such, the iPhone maker will be able to bring the bulk of its $252 billion cash reserves to the country, which it can use to buy anything it wants. The tax cut, as well as a one-time allowance for companies to repatriate cash held overseas without a major tax fee, could open up Apple's path to buy new companies. In fact, suggestions about Apple buying Netflix stretch back years to at least May 2016. However, the note was written before Disney's proposed acquisition of Fox's studio and TV assets.
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According to Suva and Merchant, the likelihood of Apple making the purchase this year is around 40 percent.
But, in the end, one should note that the analysts are pointing at a 40% chance of this happening, and with other ambitious programs such as the autonomous vehicle project in hand, the Apple buying Netflix still remains a faint prediction. Let us know below.
Apple has for years struggled to offer a compelling TV or movie offering. iTunes has been a huge hit for the company, but viewers have migrated increasingly to services like Netflix, Amazon or Hulu to watch their favorite shows. The acquisition would also align with its recent content creation efforts. The recent USA corporate tax cut allows firms to repatriate cash which is just sitting overseas without getting hit with huge taxes.
The undisputed king of streaming video-on-demand, Netflix is likely an attractive fruit for any company with deep enough pockets.
"Netflix is miles ahead in terms of programming hours, original content quality and time spent, and we don't expect this to change".