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Summary
- Apple Inc and Sony Music Entertainment are aiming to acquire Wondery, one of the largest podcast publishers headquartered in California, United States.
- The US-based podcaster is seeking US$300 million to US$400 million in a possible sale agreement.
- In the last few years, Apple has been upgrading its Podcast app on the iPhone and iPad. It has acquired two podcasting companies in the past - Pop Up Archive and Scout FM.
Tech giants Apple Inc. (NASDAQ: AAPL, AAPL:US) and Sony Music Entertainment, owned by Sony Corporation (NYSE: SNE, SNE:US), are reportedly eyeing the acquisition of Wondery.
California-based Wondery is one of the largest podcast publishers in the United States reaching to more than 8 million people, according to Podtrac, a podcast industry measurement firm. Wondery is seeking US$300 million to US$400 million in a possible sales deal, as per media report.
The podcaster is known for delivering popular hits such as Dirty John, Dr Death, Business Wars, American History Tellers, Gladiator and The Shrink Next Door, all top ranking on Apple Podcasts.
While Spotify has been particularly aggressive with acquiring podcasting companies over the last two years, it has not been keen on this one, said sources with knowledge of the matter in a news report. Probability of this deal closing is expected in the next few months. However, there is no surety that the negotiations may not fall apart.
The price tag of US$300 million might scare off some bidders who believe the podcasting industry to be comparatively small. But the kind of podcast content Wondery develops can be turned into television series and other forms of content. Already more than a dozen TV shows from Wondery podcasts have been developed including a program on WeWork for Apple Inc.
For Apple Inc, purchase of Wondery would mark a prominent investment into podcasting, which will give the company a library of original content to help push its TV+Video service, while creating podcasts to augment its video efforts.
In the last few years, Apple has been upgrading its Podcast app on the iPhone and iPad. It has added new analytics tools for podcasters, launched a Mac app and improved its outreach efforts to connect with more content creators. In the past Apple Inc acquired two podcasting companies, Pop Up Archive in 2017, a startup with technology that improves podcast searching, and Scout FM, a podcasting service that turns shows into radio-like stations.
Meanwhile, Sony Music Entertainment has already invested into many podcasting ventures and funded a dozen of original podcasts. It has been among the top aggressive music companies pursuing this acquisition after Spotify Inc. who seems to be not keen on clinching this deal.
With the talks underway, here’s the stock performance and financials of Apple and Sony:
Apple Inc. (NASDAQ:AAPL)
Current Stock Price: US$118.69
The global technology leader and manufacturer of the Apple iPhone range, iPad and other software products, Apple Inc. forayed with Macintosh in 1984.
The stock has rallied this year with 61.67 per cent gains year-to-date (YTD). Current earnings per share (EPS) is US$3.29. The stock holds price-to-earning ratio of 35.10, price-to-book ratio of 28.059, price-to-cash flow ratio of 25.60 and debt-to-equity (D/E) ratio of 1.72. Positive return on equity (RoE) and return on assets (RoA) is 70.58 per cent and 16.69 per cent, respectively.
The tech firm distributed quarterly dividend of US$0.205. Dividend yield stands at 0.691 per cent.
Apple reported revenues of US$64.7 billion in the fourth quarter of 2020 (period ended September 26). The operating income in Q4 2020 was US$14.77 billion, a decline by 5.44 per cent year-over-year. Its cash and cash equivalents as declined by 22.16 per cent YoY to US$38.01 billion (as of September 26). The company’s international sales accounted for 59 per cent of its quarter’s revenue.
Apple YTD Chart (Source: EODHD/Others, Thomson Reuters)
As per a recent news report, the technology innovator has put Pegatron 4938.TW, its Taiwanese supplier working on iPhone assembly chain, on probation, for violating its supplier code of conduct.
Reportedly, Pegatron had asked its student employees to work on night shifts and overtime. It further mis-classified student workers and falsified paperwork to disguise breach of the code of conduct. All new business from Apple for Pegatron is put on hold until further corrective actions are taken.
Sony Corp (NYSE: SNE, SNE:US)
Current Stock Price: US$89.39
Sony Corp’s business is primarily into consumer electronics, manufacturing appliances and semiconductors. It later diversified into entertainment content, music, and financial services. On September 17, the company marked 50 years on the New York Stock Exchange (NYSE).
The stock gained 31.45 per cent YTD. Its current earnings per share (EPS) is US$6.38. The stock holds P/E ratio of 12.80, P/B ratio of 2.29, P/CF ratio of 7.50 and debt-to-equity (D/E) ratio of 0.50.
Its RoE stands at 20.49 per cent and RoA of 3.90 per cent. The company paid semi-annual dividend of US$0.228, yielding of 0.509 per cent.
Sony YTD Chart (Source: EODHD/Others, Thomson Reuters)
According to second quarter results for FY2020 (period ended September 30), the company reports total revenue of JPY 2,113,486 million. Its sales and operating revenue in Q2 FY2020 were JPY 2113.5 billion, a decrease of JPY 8.8 billion from the same period last year. The operating income increased by JPY 38.8 billion to JPY 317.8 billion in Q2 FY2020.
