Dr. Dre to become a Billionaire?

[MetroPhillyTiger]

So people actually pay $300 dollars to walk around with these things? I remember when folks were paying a couple hundred dollars to listen to portable CD players. Now you can't give them away...if you can find one.

 

[JAG89]

Do yall realize what Carlyle Group just did. They stuck $500 million in there, appears to bought dang near half the company and and are about to walk away with $1.5 billion after this sale? They didn't do one ounce of work to help the company grow.

In that case, someone gave them the heads up on the deal. It's like acquiring property dirt cheap knowing that a major investor is about to buy all the property to re-develop the area. It happens all the time. When I worked for the City of Lynchburg, there was this Arabic dude that was always in our office wanting to look at the CSO (Combined Sewer Overflow) plans. The CSO project is a state and federal mandated project to cleanup the Chesapeake Bay and the entire project was worth way over billions of dollars. Since the City of Lynchburg is located right of the James River, which flows into the Chesapeake Bay, the city received one of the larger portion of the money. This dude would try to get ahead of the construction phase and buy up all the properties that he thought the City would have to acquire in order to construct the project. It's called flipping property in order to make a profit.

 

[JAG89]

So people actually pay $300 dollars to walk around with these things? I remember when folks were paying a couple hundred dollars to listen to portable CD players. Now you can't give them away...if you can find one.

From what I've read on tech sites, they are probably worth only $50 retail at the most. It's the name that people are buying, which is "Beats by Dr. Dre".

 

[JROCK]

:tup:

From what I'm seeing, every media outlet is making it look like Dre is about to make $3.2 billion, which in actuality he will be making a profit of $550 million on a business that his portion is worth $250 million. At $1.1 billion, he still would be a billionaire, but not $3.2 billion plus his current worth of $550 million. It would be the $550 million profit plus his current worth of $550 million, which is $1.1 billion.

And for Dre to actually become a billionaire, he has to own at least 21.875% of Beats Electronics, which put him right at $1 billion dollar worth of assets after the sale. It is estimated he owns between 20% to 25%.

Dr. Dre's current networth is probably inclusive of his shares in Beat before the sale. Anyway you cut it though, Ole Boy will be sitting pretty..........

 

[BulldogM.Ed.23]

I was always in to consciousness rap (P.E., ACQ, The Roots, Gang Starr, etc.), but I always liked this video. I guess now it was waayyyy ahead of it's time.

[video=youtube;c80dWbiONqM]http://www.youtube.com/watch?v=c80dWbiONqM[/video]

 

[jsupop33]

My question is, with a 51% market share, why would they sell now? Also, why did they buy back the shares from HTC just to sell to Carlyle group. I wouldn't have sold the company at this point.

 

[MetroPhillyTiger]

From what I've read on tech sites, they are probably worth only $50 retail at the most. It's the name that people are buying, which is "Beats by Dr. Dre".

If the deal keeps his name on the product but he no longer gets a cut then I wouldn't do it. However, since this is an expensive fad product, it would be good to dump it while its hot.

 

[JAG89]

My question is, with a 51% market share, why would they sell now? Also, why did they buy back the shares from HTC just to sell to Carlyle group. I wouldn't have sold the company at this point.

If you could pull the wool over the eyes of a big investor by making them believe that a product is worth more than it really is, would you buy up the shares in the company that make that product just to make a larger profit before your big investor realizes that they have been duked? It's just like flipping property to make a profit, timing is the key to when to buy and sell shares in a company.

 

[JAG89]

If the deal keeps his name on the product but he no longer gets a cut then I wouldn't do it. However, since this is an expensive fad product, it would be good to dump it while its hot.

Which is exactly what the Carlyle Group is doing. This could be a sign of Apple trying to keep pace with all the new innovations that Microsoft Windows has come out with, which is not a good sign for Apple. Although it is a stable platform, Apple is way too limited to interact with different types of devices. Eventually your cell phone will become your universal remote control for all your devices, which is a technology that was first release by Microsoft through XBox. If you live near a Microsoft Store, go visit it and notice the number of kids inside the store playing with the different Microsoft devices. Microsoft has really capture the attention of the future generation. They even have a 3-D printer demonstrating how 3-D printing works.

 

[jsupop33]

Which is exactly what the Carlyle Group is doing. This could be a sign of Apple trying to keep pace with all the new innovations that Microsoft Windows has come out with, which is not a good sign for Apple. Although it is a stable platform, Apple is way too limited to interact with different types of devices. Eventually your cell phone will become your universal remote control for all your devices, which is a technology that was first release by Microsoft through XBox. If you live near a Microsoft Store, go visit it and notice the number of kids inside the store playing with the different Microsoft devices. Microsoft has really capture the attention of the future generation. They even have a 3-D printer demonstrating how 3-D printing works.

Man, as a company, Microsoft sucks right now. Hopefully, this new CEO changes things.

 

[JAG89]

Man, as a company, Microsoft sucks right now. Hopefully, this new CEO changes things.

I guess you don't pay any attention to technical innovation. Who would have thought that they could stream their complete movie file stored on their external hard drive at home from anywhere they are able to obtain wifi or internet connection 5 to 10 years ago? Someone has come up with a free app that does just that for all Windows 8 phones. Although Apple is a much stable platform, Apple is way too limited to work with non-Apple devices, which is why the government and businesses have kept Microsoft Windows as its main operating system. Also, hackers are figuring out how to hack into Apple i-phones. I'm sure the reason why Apple phones are becoming unstable is due to Apple trying to broaden its phone platform to run different applications. All it takes is one unsecured application for hackers to break into a platform. It's like creating an open portal for individuals to obtain data from others.

Now back to the topic, Beats Electronic is not worth $3.2 billion. It's too much of a fad base business instead of a substance base business to be worth $3.2 billion. This is definitely not a good purchase for Apple, since the bottom could fall out of it any time and they could be left with a bunch of worthless headphone that they bought for $3.2 billion.

 

[jsupop33]

I guess you don't pay any attention to technical innovation. Who would have thought that they could stream their complete movie file stored on their external hard drive at home from anywhere they are able to obtain wifi or internet connection 5 to 10 years ago? Someone has come up with a free app that does just that for all Windows 8 phones. Although Apple is a much stable platform, Apple is way too limited to work with non-Apple devices, which is why the government and businesses have kept Microsoft Windows as its main operating system. Also, hackers are figuring out how to hack into Apple i-phones. I'm sure the reason why Apple phones are becoming unstable is due to Apple trying to broaden its phone platform to run different applications. All it takes is one unsecured application for hackers to break into a platform. It's like creating an open portal for individuals to obtain data from others.

Now back to the topic, Beats Electronic is not worth $3.2 billion. It's too much of a fad base business instead of a substance base business to be worth $3.2 billion. This is definitely not a good purchase for Apple, since the bottom could fall out of it any time and they could be left with a bunch of worthless headphone that they bought for $3.2 billion.

1. Microsofts products have been sucking for years. Their first tablet (surface) was horrible, Windows Vista and 8 were both horrible. The Zune was aight at best. To me, they operate like a tech company run by old people with no clue about young consumers.

2. Beats does more than sell headphones. They have expanded to selling technology. That is why they bought those shares back from HTC. Cell Phones now boast about having beats audio installed. Even the HP laptop I just bought made having Beats audio a prominent part of their marking write up.

 

[CEE DOG]

Still trying to figure out why there is so much hate for a black man who turned his life around, and just got a major business deal the correct way? Oh I get it, he is black, and not white, therefore blacks have to put him down.

 

[jsupop33]

What are you talking about Cee? No one is hating on Seen Just discussing the particulars of the deal. I do wonder why they gave the Carlyle Group a free lunch.

 

[CEE DOG]

I know you aren't, but your buddy is on some other stuff.... :lol:

What are you talking about Cee? No one is hating on Seen Just discussing the particulars of the deal. I do wonder why they gave the Carlyle Group a free lunch.

 

[jag4life]

Now back to the topic, Beats Electronic is not worth $3.2 billion. It's too much of a fad base business instead of a substance base business to be worth $3.2 billion. This is definitely not a good purchase for Apple, since the bottom could fall out of it any time and they could be left with a bunch of worthless headphone that they bought for $3.2 billion.

You know absolutely nothing about Beats by Dre, huh? LOL

 

[JAG89]

1. Microsofts products have been sucking for years. Their first tablet (surface) was horrible, Windows Vista and 8 were both horrible. The Zune was aight at best. To me, they operate like a tech company run by old people with no clue about young consumers.

The only thing Apple has over Microsoft is that it provides a stable platform for those that don't want to deal with the hassles of Microsoft's less stable platform.

2. Beats does more than sell headphones. They have expanded to selling technology. That is why they bought those shares back from HTC. Cell Phones now boast about having beats audio installed. Even the HP laptop I just bought made having Beats audio a prominent part of their marking write up.

It's a generational fad type business that is way overpriced, which makes no sense why Apple would pay $3.2 billion on such a business, unless they know this fad is guaranteed to last for at least the next 10 years like Nike with Jordans and I have yet to see people of different generations tearing down mall doors for the new Beats Electronics.

Here's a tech review:

Confession: a couple of years ago, I acquired a pair of Beats cordless Bluetooth headphones. I call that fact a confession because Beats headphones are much derided among the technorati, and certainly among gadget reviewers, as being all flash and no substance. I don't think they sound all that bad, but I also haven't been able to use them for the last month or so, because the 'phones are going through one of their frequent periods of being unable to connect to my phone.

In short, Beats don't beat a whole lot. Koss, Sennheiser and Harman Kardon they ain't.

http://mashable.com/2014/05/08/apple-beats-not-headphones/

 

[jsupop33]

The only thing Apple has over Microsoft is that it provides a stable platform for those that don't want to deal with the hassles of Microsoft's less stable platform.



It's a generational fad type business that is way overpriced, which makes no sense why Apple would pay $3.2 billion on such a business, unless they know this fad is guaranteed to last for at least the next 10 years like Nike with Jordans and I have yet to see people of different generations tearing down mall doors for the new Beats Electronics.

Here's a tech review:

1. You won't hear me argue about Apple. I am not an Apple fan. The only product of theirs I use is my Ipod. I do think Ipads are the best tablet overall but overpriced for most consumers needs. My wife has a macbook and has all type of compatibility issues.

2. I would never buy a pair of Beats by Dre but I think you are severely underestimating their marketing power right now.

 

[Fiyah]

According to Forbes, if Apple purchases Beats Electronics, for which Dre reportedly owns a 20-25 percent share, the acquisition won't officially make him a billionaire, but his take of the $3.2 billion would get him $800 million before taxes. Do you know how many albums and concert tickets he would need to sell to gross that amount of money?

Is Dr. Dre The World's First Billionaire Rapper?

In August 2011, Dre and Jimmy sold 50% of their Beats to Taiwanese electronics company HTC for $309 million. In a strange move, HTC sold 25% of its stake back to Dre and Jimmy for $150 million almost exactly one year later. In September 2013, the private equity firm Carlyle Group purchased HTC's remaining 25% stake. Carlyle also purchased another 25% stake which again left Jimmy and Dre with 25% each. The Carlyle investment valued the company at $2 billion which meant Dre and Jimmy's stakes were worth $500 million each.

First off, Dr. Dre has a $200 million fortune that has nothing to do with Beats By Dre. This fortune comes from music, producing and touring. Next we used Beats By Dre's $2 billion valuation from the Carlyle Group investment that occurred just five months earlier. At $2 billion, Dre's 25% stake added an extra $300 million after taxes to his net worth.

Assuming that Apple is paying all cash, Dr. Dre will earn $800 million off the Beats sale. The investment will qualify for long term capital gains treatment which will bring his Federal tax rate down from 40% to 20%. As a resident of California, Dre will pay 13.3% state taxes for a grand total tax burden of 33.3%. That means Dre will pay roughly $266 million in taxes off this deal, leaving him with a $534 million profit.

Based on the numbers that are available at the time of this writing, after the Beats sale goes through Dr. Dre will be worth $735 million.

Where these numbers might change is if we find out that part of the deal will come in the form of Apple stock instead of cash. As of Friday afternoon, Apple is trading at $585 per share. That's way up from when it dipped down below $400 a year ago, but 16% down from its all time high of $700 back in September 2012.

This is from Celebrity Networth, read more here

 

[JAG89]

Is Dr. Dre The World's First Billionaire Rapper?

In August 2011, Dre and Jimmy sold 50% of their Beats to Taiwanese electronics company HTC for $309 million. In a strange move, HTC sold 25% of its stake back to Dre and Jimmy for $150 million almost exactly one year later. In September 2013, the private equity firm Carlyle Group purchased HTC's remaining 25% stake. Carlyle also purchased another 25% stake which again left Jimmy and Dre with 25% each. The Carlyle investment valued the company at $2 billion which meant Dre and Jimmy's stakes were worth $500 million each.

First off, Dr. Dre has a $200 million fortune that has nothing to do with Beats By Dre. This fortune comes from music, producing and touring. Next we used Beats By Dre's $2 billion valuation from the Carlyle Group investment that occurred just five months earlier. At $2 billion, Dre's 25% stake added an extra $300 million after taxes to his net worth.

Assuming that Apple is paying all cash, Dr. Dre will earn $800 million off the Beats sale. The investment will qualify for long term capital gains treatment which will bring his Federal tax rate down from 40% to 20%. As a resident of California, Dre will pay 13.3% state taxes for a grand total tax burden of 33.3%. That means Dre will pay roughly $266 million in taxes off this deal, leaving him with a $534 million profit.

Based on the numbers that are available at the time of this writing, after the Beats sale goes through Dr. Dre will be worth $735 million.

Where these numbers might change is if we find out that part of the deal will come in the form of Apple stock instead of cash. As of Friday afternoon, Apple is trading at $585 per share. That's way up from when it dipped down below $400 a year ago, but 16% down from its all time high of $700 back in September 2012.

This is from Celebrity Networth, read more here

:tup:

Dre's after taxes ($266 million) worth would be $735 million. If it wasn't for taxes, he would be worth $1,001,000,000 dollars, which is $1 million dollars over $1 billion dollars. It seems like the State and Federal governments will be keeping Dre from becoming the first billionaire rap/hip-hop artist.

The initial claim of Dre's BEFORE taxes worth of $1.1 billion dollars, which was previously posted by MetroPhillyTiger wasn't that far off.

http://money.cnn.com/2014/05/09/technology/innovation/dr-dre-billionaire/index.html?hpt=hp_t2

Dre -- whose given name is Andre Young -- founded Beats along with music producer Jimmy Iovine. According to various reports, he holds a stake of between 20% and 25% following a $500 million investment last year from private equity firm The Carlyle Group (CG), which was said to have valued the company at around $1 billion.

Forbes pegged Dr. Dre's net worth last month at $550 million. Let's assume he does own 25% of Beats. That stake would have been worth $250 million before the Apple deal chatter, leaving Dre with about $300 million from other investments and ventures, such as his music career.

If Apple does purchase Beats for $3.2 billion, then Dre's presumed 25% stake would be worth $800 million. Add that to his $300 million in non-Beats assets and the rapper would be worth $1.1 billion.

 

[JAG89]

1. You won't hear me argue about Apple. I am not an Apple fan. The only product of theirs I use is my Ipod. I do think Ipads are the best tablet overall but overpriced for most consumers needs. My wife has a macbook and has all type of compatibility issues.

2. I would never buy a pair of Beats by Dre but I think you are severely underestimating their marketing power right now.

I'm not too familiar with today's generational trends, but it does appear like a very risky move on Apple's part, since the acquisition of Beats is based on the longevity of a pure trendy base product. And if Dre is the business-minded person some on here say he is, I'm sure he will be working on a product to compete with his former product Beats, unless there's a clause in the acquisition that says he can not produce another product to compete with Beats.

 

[In_The_662]

2. I would never buy a pair of Beats by Dre but I think you are severely underestimating their marketing power right now.

Severely. As most people know, they are WAY overpriced and only good for the casual user. There are much cheaper headphones below cost over 50% less and blow them out the water

http://www.amazon.com/gp/product/B0..._m=ATVPDKIKX0DER&pf_rd_r=1DEAEH1PTHZPKAGVS015

But they are doing a great job at making these a fashion piece that make you "uncool" if you don't have them (celebrities as well as DJs wearing them around their neck.

 

[JAG89]

It would be nice if our kids had more of an interest for the substance base products, such as robotics and other futuristic products that would revolutionize the world the way the Industrial Age did, which started some time in the 1700's. It seems like our kids are less interested in shaping the world's future, but instead more concerned with being in style.

 

[jsupop33]

I'm not too familiar with today's generational trends, but it does appear like a very risky move on Apple's part, since the acquisition of Beats is based on the longevity of a pure trendy base product. And if Dre is the business-minded person some on here say he is, I'm sure he will be working on a product to compete with his former product Beats, unless there's a clause in the acquisition that says he can not produce another product to compete with Beats.

I think he goes in another direction. I could see him producing movie scores and stuff like RZA.

 

[JAG89]

You know absolutely nothing about Beats by Dre, huh? LOL

I do know this, the headphones y'all are buying are way OVERPRICED and I'm not into trendy stuff like most of you young folks are into. Therefore, you are right, I know absolutely nothing about the trendy fad non-substance business called Beats Electronics. But maybe you can change my mind by showing me the substance value in Beats Electronics.