Is Apple Planning a Buying Spree? 5 Potential Targets From Time Warner to Tesla

Is Apple Planning a Buying Spree - H 2016

With his stock falling, CEO Tim Cook could tap a $206 billion war chest for a splashy acquisition.

This story first appeared in the Feb. 19 issue of The Hollywood Reporter magazine. To receive the magazine, click here to subscribe.

Apple CEO Tim Cook is in a pretty enviable position these days.

On Jan. 26, the technology giant reported an $18.4 billion profit that ranks as the biggest quarterly payday for a publicly traded company. Sales of Apple Watches, Apple TVs and iPhones never have been higher.

So why are investors bailing on Apple stock? Shares were down 10 percent this year as of Feb. 8. Wall Street is worried about where growth will come from in the future, with some analysts predicting that Cook, 55, either wants or will be forced to use some of the $206 billion Apple has saved up to go on a buying spree.

What might Cook purchase? Here are five of the most talked-about targets:

1. Time Warner 
Market Cap $58.1B

Apple's iTunes service has a steady need for quality content to sell and presumably wants to build its own streaming service to compete with Netflix, Amazon Prime Video and Hulu. Negotiations with Hollywood studios to boost Apple TV's content offering have gone poorly. So getting its hands on Warner Bros., Turner and HBO makes sense. Time Warner, though, already has turned down an $80 billion bid from 21st Century Fox. Some analysts believe Apple wants HBO only, and Time Warner CEO Jeff Bewkes might be willing to part with it for something north of $30 billion. But at those prices, analyst Daniel Ernst of Welch Capital Partners believes an Apple/Time Warner deal is "exceptionally unlikely."

2. Netflix
Market Cap:

Instead of launching its own streaming TV service, why not just acquire the industry leader? With 74 million global subscribers (and growing), Netflix is cashing in as an estimated 1.5 percent of U.S. cable customers cut the cord each year. Plus, Netflix shares are down about 18 percent this year, making the company an attractive acquisition target.

3. Twitter 
Market Cap: $12.2B

Just two years ago, Twitter was a $40 billion company that seemed unstoppable. But slower-than-expected user growth has pounded the stock so hard that just about everyone on Wall Street figures it's ripe for a takeover. Apple loves to dominate the markets it is in and values simplicity, making Twitter's microblogging platform attractive. Twitter has about 307 million monthly active users who send hundreds of thousands of tweets a minute. Apple could use that reach to beef up its Apple Music and Apple TV products.

4. Pandora 
Market Cap: $2.1B

If Apple's goal is to rule the music industry, then an acquisition of Pandora (which it could buy for a song, so to speak) makes more sense than competing with it. Pandora boasted 78.1 million active users in the most recent quarter who listened to the digital music service for 5.14 billion hours. Like Twitter, the stock has been crushed, down 57 percent in less than a year, giving rise to the notion that if Apple doesn't acquire Pandora, a competitor probably will.

5. Tesla
Market Cap:

Apple wants to be a player in the electric, connected-car business — preferably the self-driving variety. The company's "Project Titan," reportedly a code name for its secret car division, could benefit immensely from Tesla's advanced battery technology. In fact, a shareholder at Apple's annual meeting told Cook he should consider it. Tesla CEO Elon Musk already has confirmed a meeting with Apple, though he didn't say what was discussed nor who was present.