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Oh my goodness guys a big investment bank out of europe is predicting the apple will acquire tesla in 2019 this would be arguably the biggest acquisition in the history of mankind i want to go ahead and look at the report on why they believe that apple will go ahead and acquire tesla guys then we got to answer some questions here okay is it even possible from a
Regulation standpoint with the government’s allow this from a money standpoint we could app will actually buy tesla would it make sense for apple to buy tesla would it make sense for tesla to sell out to apple okay we’re talking about how realistic this this would be if it happens at 2019 like what’s the possibility like a 5% chance a 50% chance like how possible
Is this okay would i want this so my wife is a big shareholder of apple i’m a big shareholder of tesla it’s the best of both worlds what i want something like this to happen what i want apple to acquire tesla and if this did happen if this this move did happen in 2019 what would i go ahead and do okay i want to talk about all this so first off let’s look at this
Report here so saxo bank speculates on the apple tesla link-up saxo bank has added apple by tesla to his list of outrageous predictions for 2019 they say apple has a financial strength to fulfill elon musk’s wildest dreams ensuring that tesla doesn’t have to balance capital expenditures to cash flow generation in the short term they also go on to say that apple
Realizes that if it wants to deepen its reach into the lives of its user base the next frontier is the automobile as cars become more digitally connected after all the late steve jobs showed that a company needs to bet big and to vet wild to avoid complacency and a relevancy the saxo prediction is that apple secures funding at five hundred and twenty dollars
A share for tests okay this would be a sell out for five hundred and twenty dollars they’re predicting that tesla would actually sell out for okay that’s a substantial premium for where tesla shares are trading out right now around the three hundred and sixty dollar mark so that’s a pretty big move there okay now as far as on the actual stock prices of each of
These stocks the last couple months have obviously been rough for apple who was around $230 do a couple months ago and now we’re looking at about a hundred and seventy-six dollar stocks obviously in the short term it’s been rough but to be fair it’s been rough for a lot of stocks out there as far as tesla it’s a complete opposite just a month or two ago this was
A stock trading around two hundred and sixty dollars a share and despite the market being an incredibly weak tesla’s a stock has just absolutely exploded now around three hundred and sixty dollars a massive massive move in about a month or two span especially when you consider how weak the markets have been over the last few months okay so here’s the deal we got
To talk about how you know if this deal is even possible okay it’s impossible from a regulation and money standpoint first off from a regulation standpoint here’s what we have we have two us companies okay two us companies and two companies that are in very very different businesses tesla obviously being more automobile related in energy products in the future
Right apple being smartphones and computers and things like that two very very different businesses and two businesses that are us-based so from a regulation standpoint there is no question this would have a very easy time getting through okay the type of deals that would be very hard to get through something like imagine if like ups try to buy fedex or something
To companies i almost have a monopoly on shipping try to acquire each other like the government wouldn’t allow something like that however two companies you know even though they’re tech there’s so far different business models that the government would have no problem getting you know allowing that to go through and the fact that they’re both us-based makes it
That much easier so from a regulation standpoint without question this is a very easy deal to get done if it was to happen okay from a money perspective could this deal go through so tesla have five hundred twenty dollars a share that would probably put it at somewhere around an eighty billion dollar valuation eighty to ninety billion dollars apple could acquire
Them overnight without a problem okay apple has two hundred and thirty two hundred and forty million dollars in cash just sitting on their balance sheet so if you’re thinking about it from a money perspective like apple should pull it off they wouldn’t even have to take out debt now if apple wanted to take out debt to acquire them they could easily do that at an
Unbelievably low interest rate so money-wise it’s not even a question apple could do it either through debt or just buy them cash out like like nothing okay even at a huge premium like a five hundred twenty dollar premium so if you’re asking is it possible absolutely from our regulations ten point in money perspective it’s a very to pull off all right now would
It make sense for either side let’s think about this we gotta think about it further you know with the with the shoes on each company’s foot okay from apple’s perspective would it make sense yes and no first off on the no perspective apples in a business model where they like to send small things computer things around that you know they don’t even make the
Devices themselves okay they you know obviously incorporate the chips they design everything but in terms of does apple actually you know have put the devices together and take your stuff no they they outsource all that to a company named foxconn and pegatron out in china they’re the ones that put all their devices together the computers the you know the ipads
The phones everything tesla’s business model is tesla employees actually put their cars together each and every day okay very different business models and it’s a very capital-intensive business model that tesla has so if apple’s own in canada from that perspective you would be undef initely a negative for them however on the flipside applica look at this is you
Know tesla’s growing massively right now they should continue to grow massively hey we have the funding we have the money to to go ahead and fulfill everything that elon musk wants to do you had a really brilliant management team as far as building brands over there we know apple loves brands tesla has an amazing brand right so if from apple’s perspective is kind
Of like yeah there’s something we don’t love this at the same time we can see we can make a lot of money off this and we could you know maybe even build things faster okay now from tesla’s perspective once again this is kind of a yes and no one is yeah apple has unlimited resources right so so you know whatever they want to do they can go ahead and use that money
However i think elon musk i don’t know if elon musk wants to be you know the second tier in within a company i’m not sure he would want to do that right also i’m not sure how confident he would be that apple would want to fund all the projects especially if it was a project that locks that say billions of dollars you know tesla is taking big losses in the past to go
Ahead and build up we’re not sure if apple won’t do that usually when apple launches products or services or things they almost start making money immediately from those things so we’re not sure about that also if you’re looking at it from the perspective of some of the tesla shareholders many tests of shareholders believe tesla is going to be $1,000 $2,000 $3,000
Even $4,000 stock within five ten years so selling out 520 dollars here in the short-term a lot of investors that are in the stocks the long-term next five 10 plus years that believe this stock is going to be you know worth you know hundreds of billions of dollars into the future if not a trillion dollars someday those type of investors are gonna might not end up
Voting for an acquisition like this okay so does it make sense from both sides a little bit yes a little bit no it’s not like it’s a smash success for either side because both sides would not get exactly what they want for this okay no how realistic is this in that it happens in 2019 i would say like less than a 3% chance a move like this actually happens in 2019
Could there be talks behind behind everybody’s back absolutely there could be talks between both companies but if i’m looking at it how realistic is it that a deal gets done like that i’m like maybe like less than a 3% chance a two or a three percent chance somewhere in there because here’s the thing guys these type of acquisitions it’s so big in transformational
And elon musk has to think about it in the respect of could this ruin tesla it’s a risk okay it’s a risk could it hurt tesla’s brand long-term could you know tesla or could apple end up wanting to defund some of the project cuz it maybe they don’t see the vision there but elon must see this he sees a vision there so from elon musk perspective it’s a risk and then if
You’re looking at from apple’s perspective tim cook and those folks over there they could look at it as a risk for them we know elon musk has done some mis eccentric behavior obviously in the past right and we know a long must likes to fund some big projects out there that obviously you know take a long time to pay off and in from a tesla’s profitability standpoint
It just barely started making money so it’s definitely a risk for both companies these are such a hard acquisition when you’re talking 80 90 billion dollars you’re talking about this would be the one of the biggest acquisitions in the history of mankind okay unbelievable on this type of scale these things don’t usually happen so if i was giving it like a realistic
Standpoint i would say a very very very small chance a deal like this could actually end up going down in 2019 okay know what i want this what i want this from you know what i’m a little bit i mean it would be nice to take a huge a massive profit in a very short amount of time absolutely in tesla that would be amazing however i believe has so much upside over the
Next five to ten years i’m not the biggest fan of it okay so i would be okay but i wouldn’t be like oh yes i’m so happy they got acquired or something because i just believe the company has so much i you know upside by itself over the long term okay then the question is if this actually went down what would i end up doing what i would personally do is obviously i
Would take my huge profit that i would you know the shares would get bought out for okay i go ahead and sell those shares and then i go ahead and buy apple stock with that money so basically then at that point i get the beautiful business model which i feel like apples business model is undervalued right now as it is today okay it’s undervalued just apples business
Models undervalued as it is today if you have any type of long-term perspective on a three a five a ten year perspective on this okay but then also if you buy apple and you’re getting the the growth opportunity that is tesla there that is huge guys that is absolutely huge so when i look at it from that perspective what would i do i would sell out my tesla shares
Take the huge profit and i refund that money right into tech to apple stock and honestly not only would i put the tests of money into apple stock but i would put i would photo massive massive amounts of more money into apple stock and in the short term over the next few months because then at that point you’re getting the upside of apples business model which is
An i feels undervalued then you get the upside of tesla’s business model inside of apple in there and at that at that point it’s just a steal you know far and away now here’s the thing i believe is a much more realistic possibility in my personal opinion our much more realistic possibility that i think would be intelligent for both companies to do is for a company
Like apple to go ahead and invest make it like a 10% ownership stake or 15% ownership stake in to tesla non-voting share so elon musk doesn’t have the risk of old tesla cut out vote us or something like that or get shareholders non-voting shares very similar to what microsoft did an apple back in 97 98 time rise okay tesla’s at a stage where they don’t necessarily
Need a ton more money but it would be helpful okay so apple that say takes a 10% ownership stake in tesla then they give them let’s say 10 billion dollars or 7 billion dollars or something like that that’s 7 or 10 billion dollars that elon musk can go ahead and fund more gigafactory zout there and get those up and rolling for it from model y get the china one both
Maybe even faster get the europe run one up and running as fast as possible okay and maybe even get another new one in united states or just continue the build out of the reno gigafactory so in my perspective i think the smartest idea for both companies would not be a full-on acquisition but would be an investment by apple i think would be i think apple would make
A ton of money on that investment over time i think from tesla’s perspective it would be ingenious especially if they could get non-voting shares because they would get a ton of cash you know a huge capital infusion by a great company who wants them to succeed because they want their investment to get bigger so in my opinion it’s a win-win if they did something
Like a 10% ownership stake or a 15% ownership stake that in my opinion is the best move for both companies we’ll see if anything actually happens there but in my opinion they should it just totally makes sense for both sides to me you know apple to make an investment on them of a 10% ownership stake or 15% ownership say so then tesla just has a massive amount of
Cash to go ahead and fund these future giga factories and things like that so anyways i want to know your guys opinion on all this do you think it’s possible that apple could acquire tesla what do you think about my opinion as far as apple making an investment tesla do you like that do you think that’s a good idea i would love to hear from you guys in that comment
Section as always thank you for watching and have a great day
Transcribed from video
APPLE TO BUY TESLA FOR $520? By Financial Education