With share repurchases and dividend payouts not helping to revive Apple’s lagging stock price, it may be time for the tech giant to tap its sizable cash pile and buy a game-changing business to excite investors. One business that could certainly fit the bill? Electric car maker Tesla , which is a place that often serves as a talent pool for Apple. ‘They could certainly [buy Tesla] if they wanted to, they certainly have the financial capacity to do so,’ said former Apple CEO John Sculley in an interview with TheStreet, adding, ‘If they chose to [buy a big company] I am sure they would only do it with a product that was intended to be revolutionary in a large addressable market — so an automobile maker like Tesla would certainly meet that criteria.’ Sculley did bring up a good point when it comes to Apple’s acquisition strategy. “Apple has no history of buying a really big company, so they would have to think about that a lot as to how they would incorporate it and manage it.’ In fact, the last sizable business of any kind that Apple bought was headphone and music subscription purveyor Beats for $2.6 billion back in 2014. Since then, Apple has likely continued down a path of acquiring small upstarts with promising future technology, while watching its cash hoard balloon. The company now has over $250 billion in total cash, which represents about half of its market cap. Apple purchasing Tesla to gain access to the company’s advanced battery technology and electric car capabilities is not such a far-fetched idea. ‘In our view, acquiring Tesla’s advanced battery technology would greatly accelerate Apple’s entrance into the next-generation auto arena, and we estimate valuable economies of scope could be realized while transitioning to mass-market volumes (e.g., consumer electronic batteries, automotive software, etc.),’ wrote FBR & Co. analyst Dan Ives in a note earlier in the year. Musk fueled the rumors last year, too, when he confirmed a meeting with Apple’s head of M&A. He didn’t specify who exactly he met. Then again, Apple may not need to do any big acquisitions to regain the confidence of Wall Street.
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