Apple Buys Beats: Why Pandora Shouldn't Worry

On Thursday's episode of MarketFoolery, Chris Hill and Motley Fool Funds analyst Tim Hanson dive into some of the numbers circling around tech giant Apple's purchase of Beats By Dre. Seven months ago, HTC sold its Beats stake for about $260 million (valuing the company at about $1 billion). Today, Apple bought Beats for $3 billion in cash and stocks. With the company's last public reports showing 10% operating margins, Tim thinks Beats investors must be pretty happy.

Chris and Tim also explore Beats' past muddied partnership with HTC and the synergy between Apple and Beats. Tim has to ask, "Is Apple spending $3 billion here just to be cool?" Then, the guys look at the Beats brand and how this acquisition will impact the music landscape overall, including streaming music leader Pandora

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Chris Hill and Tim Hanson have no position in any stocks mentioned. The Motley Fool recommends and owns shares of Apple and Pandora Media. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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