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Apple Predicted to Repatriate $200 Billion of its Overseas Cash

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A recent note issued by GBH Research has estimated that Apple will take advantage of the new U.S. tax law and will repatriate around $200 billion of its $252 billion foreign cash hoard, 9to5Mac is reporting. The firm has claimed that the tech giant will spend the cash in accelerated buybacks, another dividend hike, and potentially larger M&A, all of which will benefit the shareholders in 2018.

Apple

Earlier this week, Citi analysts predicted that there’s a 40% chance of Apple using its repatriated money to acquire Netflix. Other Wall Street analysts are also speculating whether Apple will make a big bet with this infusion of cash and do a larger deal (e.g. Netflix) to catalyze and jump start its streaming video business.

However, GBH believes that such a large acquisition would be out of character for Apple, although it did reiterate the idea in its investor note.

“To this point, while it’s likely Apple keeps its M&A deals under $2 billion in size, we strongly believe it is a ripe time for Cupertino to look ahead and make a bigger bet on a new growth area such as streaming video as with the “content arms race” well underway between Netflix (spending $8 billion this year), Disney (Fox deal), Amazon, and a host of others such as HBO and Facebook aggressively spending on content, now is the right time for Apple to make an aggressive move in our opinion on this front.”

Since Disney has just acquired Fox’s studio and TV assets, that deal is now off the table.

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