A debate has been raging in the tech space that Apple Inc. (NASDAQ:AAPL) should make an attempt to buy Tesla Motors Inc. (NASDAQ:TSLA) as both remain dominant in their respective fields of operations. CNBC’s Timothy Seymour believes the deal would fall through on the fact that Apple has never bought anything for more than $2 billion.
Apple Inc.(NASDAQ:AAPL) has the financial power to carry out any transaction, but the fact that both companies operate in different segments could be a big hindrance in any merger going through according CNBC’s Scott Wapner.
“Apple is in the business of manufacturing things that you can go in and buy, it’s an impulse buy. They are not in the business of manufacturing cars. [..] This is not going to happen. I can’t see it happening I guess the big take way is; Tesla Motors Inc. (NASDAQ:TSLA) has been climbing up in the charts and its buyable standalone, “said Mr. Wapner.
The deal would make sense as Apple Inc. (NASDAQ:AAPL) would help Tesla Motors Inc. (NASDAQ:TSLA) with its niggling manufacturing problems in the push to fulfill the growing demand for electric cars. On the other hand, Seymour argues the merger would not guarantee any value to Apple’s shareholders as Tesla Motors Inc. (NASDAQ:TSLA) is currently trading at 300 times its earnings. Karen Finerman, on the other hand, believes it would be idiotic for Apple to acquire Tesla.
“Apple has never done a transaction more than $2 billion; I don’t know what the Beats deal was around that amount. You get to a place where Apple Inc. (NASDAQ:AAPL) will not only be going to a place deep end of the pool but they will be way overpaying for a company that’s a technology company. Their technology company, “said Mr. Seymour
Apple Inc. (NASDAQ:AAPL) has one of the best supply chains for its products that would be of great benefit to Tesla Motors Inc. (NASDAQ:TSLA) in the distribution of the electric vehicles to other markets. Apple remains a leader in the software space and should help Tesla in the development of new models with more capabilities. It has lot of free most popular apps.
Apple Inc. (NASDAQ:AAPL) on the other hand will benefit by adding a luxury car brand to its already exquisite line of products while also tapping into CEO, Elon Musk’s experience.
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