Netflix, Time Warner Shares Benefit from Apple Rumors
Rumors resurfaced Thursday that Apple was looking for a media company to acquire.
Shares of Netflix and Time Warner rose Thursday after rumors surfaced again that Apple was looking for a media company to acquire with some of its roughly $215 billion in cash on its books.
Wall Street has likely been propping up shares of Time Warner ever since 21st Century Fox made a run for its rival late in 2014 with an offer of $85 a share. On Thursday, the stock closed 2 percent higher at $74.07.
The Financial Times reported Thursday that Apple executive Eddy Cue, who oversees, iTunes and Apple Music, broached the idea of an acquisition during a meeting at Time Warner's headquarters in 2015 with Olaf Olafsson, the media conglomerate's head of corporate strategy.
The report cited unidentified people, and it noted that Apple also was interested in Netflix, shares of which rose 3 percent to $102.81 per share on Thursday.
Apple has been looking to expand its Apple TV product into a service akin to Hulu and Amazon Prime Video, but observers have been speculating for more than a year that the technology behemoth might prefer to simply purchase an existing product instead. An acquisition of Netflix would make it the No. 1 subscription video service on the planet, with 81.5 million subs worldwide.
With Time Warner, on the other hand, Apple would get HBO's streaming services, HBO Now and HBO Go. Plus, Apple was allegedly frustrated in its attempts to license a meaningful amount of content for its own potential service, and a Time Warner acquisition would presumably solve that issue, in at least some measure.
Hulu is owned by Disney, 21st Century Fox and NBCUniversal, so those companies don't relish the idea of handing content to an Apple product that would compete with Hulu, and earlier this year Time Warner was interested in taking a stake in Hulu, as well.
At the end of trading on Thursday, Apple's market capitalization was $550 billion, while Netflix was at $44 billion and Time Warner was at $58 billion.