NEW YORK (TheStreet) -- Doug Kass of Seabreeze Partners is known for his accurate stock market calls and keen insights into the economy, which he shares with RealMoney Pro readers in his daily trading diary.
Among the posts this past week were items on Apple's Beats acquisition and a potential Minsky moment.
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Nuthin' But a P/E Thang
Originally published on Thursday, May 29, at 7:22 a.m. EDT.
Last night, Apple (AAPL) announced that it is paying $3.0 billion ($2.6 billion down, with a $400 million earn-out) to acquire headphone maker and music-streaming service Beats Electronics (co-founded by hip-hop artist Dr. Dre and music executive Jimmy Iovine).
We will likely be inundated (again) with views in the business media as to the merits of this transaction. Already The Wall Street Journal's lead story is this deal.
Most talking heads will take the stage and declare this transaction to be profoundly positive or profoundly negative, as there is a tendency to develop extreme observations and make important conclusions based on every bit of corporate news -- particularly as it relates to some of our larger and higher-profiled publicly held companies.
My view of the Beats acquisition is unchanged from mid-May -- it doesn't move Apple's needle.
In the fullness of time I can think of a number of reasons why the proposed transaction is, alternatively, modestly smart and slightly additive or is modestly stupid and slightly subtractive.
The success or failure of the Beats deal will largely be a function of the ability of two different cultures (Dre/Iovine and Apple) to integrate smoothly.