We’re starting to see an interesting trend in tech companies right now, which is leading some to question whether Apple Inc. (NASDAQ:AAPL) will follow in the footsteps of these companies. First Dell Inc. (NASDAQ:DELL) shareholders voted to go private, and now BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) has announced a go-private offer from a consortium led by Fairfax Financial Holdings Ltd (TSE:FFH).
So what would it take for Apple to go private?
First it’s important to note the major problems that have led to Dell and BlackBerry going private. Both of these companies have failed to adapt quickly enough to the changes in the technology sector. Apple Inc. (NASDAQ:AAPL), on the other hand, already reinvented itself once without having to go private, although that was under Steve Jobs’ leadership.
But let’s take a look at the products offered by these companies. Dell Inc. (NASDAQ:DELL) is primarily focused on computers, specifically, desktop computers, which are rapidly disappearing. BlackBerry Ltd (NASDAQ:BBRY) (TSE:BB) focuses mainly on its failed BlackBerry 10 handsets, although it does have its fingers in a couple of other pies, like BlackBerry Enterprise System, the success of which, at this point, is debatable.
So one company’s main focus represents one of Apple’s past focuses, while the other represents the company’s current focus. Needless to say, both of these companies demonstrate that there must be some serious problems before they would consider going private. We’re not at that point with Apple Inc. (NASDAQ:AAPL), not by a long shot. The company rakes in billions every month, so no matter what you think about the company’s innovative abilities (or some would say lack, thereof) now, its executives are laughing all the way to the bank.
Apple’s cash stash
But what about the company’s large cash hoard? Could it be used to take the company private? The company would need to get some serious financial backing to do that, and with Apple’s astronomical size, it’s unlikely financial institutions would be able to handle the underwriting for that huge deal.
Apple Inc. (NASDAQ:AAPL) CEO Tim Cook will meet with activist investor Carl Icahn on Monday to talk about a share buyback plan. Icahn wants the company to take advantage of the ultra-low rates being offered right now. So just how big will the share buyback go? There’s certainly going to be an upper limit because Apple is just too big to buy right now. It can’t even buy itself because of how large it is. Besides, most of its cash is overseas, and it’s too expensive to repatriate that.
So beware. The day Apple Inc. (NASDAQ:AAPL) starts talking about going private will be the day the company feels like it is backed into a corner with no other options. Like Dell. Or BlackBerry.