Apple Buying Tesla For $40 Billion 'Makes A Lot Of Sense',Gene Munster Says
Figuring out what to do with hundreds of billions of dollars of cash is a problem that most companies would love to have. As absurd as it sounds to think that Apple Inc.'s cash balance is putting pressure on the company, shareholders, activists and onlookers have been pestering Apple for years about what it intends to do with its cash.
Piper Jaffray analyst Gene Munster told Benzinga he believes Apple will likely use a portion of that cash to expand its presence in the auto industry via M&A. In fact, Munster sees a buyout of Tesla Motors Inc as a practical and shrewd possible move for Apple.
Munster said that $35–50 billion for Tesla is "not a lot of money" for Apple and that the move "makes a lot of sense."
In addition to Tesla's electric car technology, Munster sees value in its battery technology and its engineering and IT infrastructure.
If Apple decides not to opt for Tesla, Munster expects the company to make one or more other automotive supplier buyouts in the near future.
This is according to Wayne Duggan 's article published January 8, 2016 1:05 PM
Disclosure: The author holds no position in the stocks mentioned.