Musk laughed “Ha!” Before responding , Is Apple buying Tesla?

During the first three months of 2017, Apple managed to add a cool $10 billion to its bank account. When the company released its earnings report earlier this week, it revealed that its cash on hand now totals more than a quarter of a trillion dollars, or $256.8 billion to be exact. While the vast majority of that case resides overseas — and subject to high taxation rates barring a new tax holiday from the Trump administration — Apple’s tremendous cash position naturally has many wondering what it plans to do with all of that money.

Upon hearing the question, Musk laughed and let out an audible “Ha!” before replying

“Yeah, I don’t think they want to have that conversation,” Musk answered. “At least I’ve not heard any indication that they do. Obviously Apple continues to make some great products and, yeah, I mean, I use their phone and their laptop, it’s cool. I mean… I don’t know what else to say.”

Jonas followed up, asking if Tesla viewed Apple as more of a competitor or a potential partner, to which Musk replied: “I mean, I don’t know what they’re going to do on the car front. Yeah, it’s not clear.”

For what it’s worth, Musk reportedly met with Apple’s mergers and acquisitions chief Adrian Perica back in 2013, though it’s unclear what was discussed between the two. Musk a few years later confirmed meeting with Apple, but said that he couldn’t “on whether those [meetings] revolved around any kind of acquisition.” For what it’s worth, an Apple/Tesla buyout would have made much more economic sense in mid-2013 back when Tesla’s market cap was still in the $4 billion range.

Don’t Miss: The best new Android feature might finally launch soon

Naturally, some analysts reflexively like to claim that Apple needs to make a large-scale acquisition, whether it be Disney or Netflix. Indeed, one of the longer standing suggestions from analysts is that Apple might want to pick up Tesla. After all, with Tesla currently embodying what Apple presumably wanted to accomplish with Project Titan, an Apple-Tesla merger would seem to make sense, at least from a culture and strategic perspective. Financially, however, the numbers just don’t add up. As it stands now, Tesla’s market cap is in the $46 billion range, and it’s beyond unlikely that Apple would shell out that kind of cash for the company. Even if we imagine a scenario where Tesla starts making real quarterly profits — the company lost $1.33 per share last quarter — the economic realities and low gross margins associated with the auto industry wouldn’t help Apple move the needle from a profit perspective.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

This site uses Akismet to reduce spam. Learn how your comment data is processed.