Meet the first billionaire in hip hop
Philip Ellison 12 May, 2014 at 02:05
The much-discussed but yet-to-be-confirmed acquisition of Beats by Apple was all anyone was talking about on Friday. This was in no small part due to the release of a video on Facebook in which rapper Dr Dre, who co-founded the Beats business, rather prematurely referred to himself as “the first billionaire in hip hop.”
The Financial Times published a report on Thursday 8th May disclosing that Apple was “in talks for a $3.2 billion Beats deal,” although Apple remained characteristically quiet on the subject. This didn’t discourage Dre from letting his excitement over the acquisition slip in an expletive-filled video with actor Tyrese Gibson.
“The deal would mark Apple’s largest acquisition to date by far,” writes Mashable’s Seth Fiegerman, “and comes at a time when other tech giants like Google and Facebook are spending billions on acquisitions like Nest and WhatsApp, respectively.”
According to John Biggs at TechCrunch, it makes perfect sense for a premium brand like Apple to pick up other high end brands, especially in the hardware space. “Beats is a successful hardware start-up in an era of fizzling hardware profit,” he says. “Logistically, Beats can make and ship thousands of units a day at a clip and with a quality that rivals Apple’s own accessory sales.”
As for the claim that Dre (born Andre Young) is the first billionaire in hip hop – how do the figures stack up? “Young’s Forbes ranking means he needs another $450 million to become hip hop’s first billionaire,” says Nyshka Chandran at CNBC. “That’s equal to a 15% stake in a $3 billion company like Beats Electronics. While it’s highly likely Young’s stake exceeds that figure, it is also important to remember that his current estimated wealth assigns some value to his stake in the company.”
If I were a famous rapper (and this is something I spend far too much time thinking about), I’d be worried about spilling the beans before any official statement has been made on Apple’s side. Dre clearly isn’t concerned about jinxing things!