Report: Apple Could Consider Bid For Netflix

According to Morgan Stanley's trade desk, traders are passing around a Forbes article that speculates on an Apple Inc. (NASDAQ: AAPL) takeover of Netflix, Inc. (NASDAQ: NFLX)

Shares of Netflix were trading higher by nearly 4 percent Monday morning.

Forbes' Jay Somaney argued that Apple could "circumvent the tedious and lengthy" process of entering the streaming video segment by simply acquiring Netflix's shares. In fact, Apple could save "many quarters if not years" worth of negotiations with various studies and other entities.

"For about $60-$70 billion, Apple can become an absolute global powerhouse in streaming content," Somaney wrote.

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Somaney added that by acquiring Netflix, Apple can create a powerhouse whose content is "unmatched" and could be "miles ahead" of Hulu, Prime Video, HBO Now. In addition, an acquisition of Netflix would be accretive to Apple's financials "right off the bat."

Apple could finance a transaction with its cash on hand, or the company could initiate an all-stock deal. Naturally, an all-stock transaction would dilute Apple's share count but it will "more than likely be easily offset by a re-energised Apple shareholder base."

"An Apple and Netflix combination via a takeover would create a streaming entertainment juggernaut the world over which would benefit shareholders of Netflix and Apple and most importantly tremendously benefit subscribers of both companies even more," Somaney concluded.