Citigroup in May put the company on a list of potential targets for Apple amid a more than $250 billion cash pile. Other names on the list included Netflix (NFLX - Get Report) , Walt Disney (DIS - Get Report) , Activision Blizzard (ATVI - Get Report) , Electronic Arts (EA - Get Report) , Take Two Interactive (TTWO - Get Report) and Hulu.
Rumors on Apple's interest in Tesla have long existed.
Tesla founder and CEO Elon Musk fueled the rumors last year when he confirmed a meeting with Apple's head of M&A. He didn't specify who exactly he met. Meanwhile, Wall Street analysts have pontificated it would be wise for Apple to buy Tesla for its battery and autonomous driving technologies. With Apple recently showing its hand on its autonomous driving ambitions, Wall Street may be onto something.
But there is one simple reason Apple won't pay more than $50 billion for Tesla (Tesla's current market cap is $53 billion), or perhaps any other mega business. It has never bought a company of any significant size before, and therefore may lack the expertise to integrate such an operation successfully.
Apple "could certainly [buy Tesla] if they wanted to. They certainly have the financial capacity to do so," former Apple CEO John Sculley said in an interview with TheStreet. "If they chose to [buy a big company] I am sure they would only do it with a product that was intended to be revolutionary in a large addressable market. So an automobile maker like Tesla would certainly meet that criteria."
Sculley explained the company "has no history of buying a really big company, so they would have to think about that a lot as to how they would incorporate it and manage it." The last large business of any kind that Apple bought was headphone and music subscription purveyor Beats for $2.6 billion back in 2014.