Is Disney Being Sold to Apple?
Key Takeaways
- Rumors are swirling about a potential Apple takeover of Disney
- With an enterprise value of $200 billion for Disney, it would be one of the most significant acquisitions in history
- On Monday this week Disney stock hit a 2023 low, while Apple stock hit a record high
Is the House of Mouse about to become the House of Apple? Whispers are circulating about a potential Disney sale, with Apple at the top of the prospective list. A struggling Disney could do with the boost, but both sides are staying quiet. Do the rumors have any merit to them? Let’s assess what we know so far.
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Is Disney getting snapped up by Apple?
Disney, which has just renewed its CEO’s contract for another two years, is going through it right now. With costly streaming content, the writers and actors strike and surviving activist investors, it’s no wonder rumors persist around Bob Iger selling the company.
Apple could be in contention to buy the Magic Kingdom, which has already made significant mergers, including Lucasfilm, Marvel and Pixar. But Disney Plus’ losses, coupled with the challenging economic environment, leave Disney rumored to post an $800 million loss in the next quarter.
It would be an absolutely astronomical acquisition — Disney’s enterprise value is $200 billion — whereas the biggest takeover Apple ever completed was $3 billion for Beats in 2014. That’s enough reason to give pause to the idea — even if it is appealing for investors.
How are the stocks faring in 2023?
The difference between Disney and Apple is stark this year. Disney’s financial woes have been well-publicized, with the company announcing a $5.5 billion restructuring plan — $3 billion of which involves slashing content production — and laying off thousands of employees. The stock is nearing a 52-week low, declining 18.7% in the last six months and hitting a 2023 low of $85.56 on Monday.
In comparison, Apple is flying. Having become the first-ever company to hit a $3 trillion valuation, it closed at a record high on Monday and hit $193.99. Since the start of the year, it’s gained 54.8%, with Morgan Stanley analysts recently reiterating their Overweight rating for the stock and believing it will hit $220 in a year’s time.
In short, the two stocks couldn’t be further apart in fortunes right now — so a sale could be very advantageous for both parties.
The bottom line
So, are we looking at the acquisition of the century? Until we hear official confirmation from either party, we’d say some more solid evidence is needed before jumping to conclusions. Of course, were the news to be accurate, expect Apple and Disney stocks to skyrocket.
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