Chasing Value: Apple's Holding $48 Billion -- For What?

Another scary thought is that Apple and other cash rich companies may spend the money to expand over seas. What will it cost Apple to make a big push into China and India?

I am picking on Apple only because it has the most cash and makes for the most interesting speculation. So here is one more thought to stir the imagination.

After selling Pixar to the Walt Disney Co. (DIS) Steve Jobs is now its largest shareholder. He has already turned the music business, mobile phone business, computer business, and animation business on its head. Given that Apple now has the resources, it seems to me that Mr. Jobs might want to acquire Disney which is capitalized at just over $68 billion. It would allow for most of the money to stay in the United States, which would be nice.

Think of what it would mean for Jobs and Apple to gain control of all that content, animation, film library, distribution and entertainment venues.

When Steve Jobs sold Pixar to Disney, monetizing his investment and getting a rich premium, he got closer to one of the worlds oldest and best recognized brands, something he already understood very well. He also increased his net worth a lot. If Apple merged or acquired Disney, then Steve Jobs would substantially increase his net worth again as there would be some premium to be paid, and nobody would be a bigger benefactor then him. A legalized form of insider trading if there ever was one.

Jobs has as much imagination as anyone at Disney. Disney has a reputation as an extremely aggressive business partner, not dissimilar from Jobs at Apple.

Apple has also been looking for long term recurring revenue that are less dependent on invention, and they accomplished this by creating iTunes. Using Disney's library and brand Apple would have vast new frontiers to conquer. Think of the possibilities to extend the value of its iPad, and a way to gain separation from the rest of the competing products to soon enter the marketplace.

Steve Jobs and Apple have the cash, the organization, and the passion to pull off such a deal. I think it would increase shareholder value all the way around. Steve Jobs does not need to do this or anything else. But that does not mean he would not consider it.

Sheldon Liber is the CEO of a small private investment company and the principal for design and research at an architecture and planning firm. He writes the columns Chasing Value and Serious Money. Disclosure: He does not own shares of the stocks mentioned.