Is Apple set to acquire EA?
Chicago (IL) – There’s a new rumor spreading in the blogosphere, suggesting the next huge takeover in a time when some companies can be acquired for pocket change. FastMoney's Guy Adami claims that he has heard that Apple may be buying game publisher Electronic Arts (EA). There aren’t any other sources indicating such a move, but given the fact that Apple sits on a $29 billion pile of iPod and iPhone cash, it would be almost silly for Apple not to go shopping these days.
In a story published by TheStreet.com, David Tong writes that there is “chatter” that Apple is eyeing EA as a takeover target. There isn’t much more to this story at this time, but we are sure that even just an idea Apple may soon be playing in the video game market may raise some speculation what that may mean for iTunes in terms of content, what it will mean for the iPhone and iPod Touch as handheld gaming platforms, and it surely wills park a new round of discussions around the topic that Apple is working on a game-console-type of device, especially since the company recently picked up several people with lots of experience in the video game industry.
We leave that one up to you to speculate what Apple may be building in the background.
Electronic Arts posted revenue of $1.65 billion in the most recent quarter, and reported a net loss of $641 million. CEO John Riccitello noted that the holiday quarter was disappointing and decided to reduce its workforce by 11% to about 1100 people as a result. EA currently has a market capitalization of just under $6.9 billion, which could mean that Apple could pay for the company out of its savings account, even if we count in that usual premium on top of the market cap. According to its most recent financial filing, Apple has about $29 billion available in cash.