Talk that Amazon (AMZN) is interested in buying Peloton (PTON) highlights the fact that mega-cap technology stocks have a huge kitty they can use for takeovers.
That idea appeared on Bloomberg, which reported that Apple (AAPL), Alphabet (GOOGL), Microsoft (MSFT), Amazon and Meta Platforms (FB) have a hefty $648 billion in cash and marketable securities combined.
Apple leads the way with $203 billion, followed by Alphabet with $169 billion, Microsoft with $132 billion, Amazon with $96 billion and Meta with $48 billion.
“Having a lot of cash on hand creates flexibility for these companies in challenging economic environments; they can put cash to work, make acquisitions,” Carlos Garcia-Tunon, head of fundamental equity at MacKay Shields, told Bloomberg. “I wouldn’t be surprised if we saw a pickup in deal activity in this environment.”
The stocks of big-name companies like Peloton and Netflix have slumped, making them more affordable, he noted. Peloton has plunged 47% over the past three months, while Netflix (NFLX) has dropped 38%.
Netflix needs to make major changes to recover and should even consider selling itself, says Needham analyst Laura Martin. “NFLX can NOT win the streaming wars given its current strategy,” she wrote in a commentary cited by CNBC.
Netflix lifted prices for U.S. and Canadian customers last month. But Martin doesn’t think that will help.
“We believe that NFLX’s pricing strategy represents a competitive disadvantage because it offers a single pricing tier, whereby every consumer has access to identical content,” Martin said. “By contrast, nearly every streaming competitor offers consumers lower-priced tiers.”
