Rumors about Apple showing interest in buying Tesla have resurfaced after the SF Chronicle reported that Apple’s M&A chief met with Elon Musk last spring. Considering Tesla’s market capitalization of more than $24 billion, such a deal would be unprecedented for Apple, but the two companies do appear to have a lot of potential synergy.
As a thought experiment, let’s take a look at a few of the reasons Apple acquiring Tesla might make sense.
Apple has the cash for itApple still hasn’t found an ideal solution for its $160 billion cash hoard. Over the past year, the company has bought back $40 billion of its own shares, with plans to repurchase an additional $20 billion. That’s more than enough to have purchased Tesla outright. While there’s a certain sensible arrogance for a healthy company like Apple believing that repurchasing its own stock is the best investment of its cash, Tesla is poised for near-limitless growth if it can disrupt the automobile industry.
via The Next Web.