Apple and Google use cash to buy...treasuries?
money.cnn.com
Apple and Google use cash to buy...treasuries?
1–10 of 26 posts
Re: Apple and Google use cash to buy...treasuries?
#2Treasuries are often used as a "risk-free" asset to adjust a portfolio in order to meet a predetermined level of risk. Someone who works in finance can probably tell us more.
Re: Apple and Google use cash to buy...treasuries?
#3> If these firms are buying U.S. debt with that money, then U.S. taxpayers are on the hook for hundreds of millions in debt payments to the same U.S. companies they already buy billions of dollars from in iPads, software and routers.
Isn't that the whole point? If it were undesirable for the US to borrow money and pay interest on it, why would the US Treasury issue bonds? And if they are issuing bonds, does it really matter who buys them?
Re: Apple and Google use cash to buy...treasuries?
#4> If these firms are buying U.S. debt with that money, then U.S. taxpayers are on the hook for hundreds of millions in debt payments to the same U.S. companies they already buy billions of dollars from in iPads, software and routers. Isn't that the whole point? If it were undesirable for the US to borrow money and pay interest on it, why would the US Treasury issue bonds? And if they are issuing bonds, does it really…
Reading the news as of late, there seems to be a new narrative against the tech companies, as if they are the new Wall St. See the bus protests, gentrification protests, aren't involved in their communities, complaining they don't pay enough taxes (while some other companies, such as oil, are receiving tax subsidies), etc.
If someone can spin negative news against them, they will.
Re: Apple and Google use cash to buy...treasuries?
#5Treasuries are often used as a "risk-free" asset to adjust a portfolio in order to meet a predetermined level of risk. Someone who works in finance can probably tell us more.
There the "risk free" aspect, but there also just really isn't much else in the world that you can buy 100 billion dollars of in just a few years. Even the entirety of taxable property in Manhattan can be had for just over twice that amount of money. Not to mention good luck trying not to move the market while buying 100 bn of anything.
Re: Apple and Google use cash to buy...treasuries?
#6Given that:
1. Some publicly traded companies have been sued for not maximizing shareholder value.
2. Not utilizing all of tax exempt vehicles provided to them could be counted as not maximizing shareholder value, unless of course there is a better investment they can make with their cash pile.
3. Given inflation of 1.5%, $100 billions in cash that Apple has would be losing $1.5 billions per year in terms of buying power. So not investing it is paramount to loosing money.
I really do not see how can anyone can claim that companies are evil for doing this. They merely operate in framework set up for them.
This also raises interesting point that it would be illegal to try to repatriate gigantic cash supplies they have because that would definitely go against maximizing shareholder value.
Re: Apple and Google use cash to buy...treasuries?
#7> If these firms are buying U.S. debt with that money, then U.S. taxpayers are on the hook for hundreds of millions in debt payments to the same U.S. companies they already buy billions of dollars from in iPads, software and routers. Isn't that the whole point? If it were undesirable for the US to borrow money and pay interest on it, why would the US Treasury issue bonds? And if they are issuing bonds, does it really…
Reading the news as of late, there seems to be a new narrative against the tech companies, as if they are the new Wall St. See the bus protests, gentrification protests, aren't involved in their communities, complaining they don't pay enough taxes (while some other companies, such as oil, are receiving tax subsidies), etc. If someone can spin negative news against them, they will.
The article goes on to criticize American tech companies for not moving overseas funds here; this after they are being criticized for buying Government debt with the money they already have here.
I am at a loss.
Re: Apple and Google use cash to buy...treasuries?
#8Not criticizing them, but if you're buying that many treasuries, it might be a good time to start paying dividends instead.
Re: Apple and Google use cash to buy...treasuries?
#9Given that: 1. Some publicly traded companies have been sued for not maximizing shareholder value. 2. Not utilizing all of tax exempt vehicles provided to them could be counted as not maximizing shareholder value, unless of course there is a better investment they can make with their cash pile. 3. Given inflation of 1.5%, $100 billions in cash that Apple has would be losing $1.5 billions per year in terms of buying p…
But a share buyback has about 8x the predicted return.
Re: Apple and Google use cash to buy...treasuries?
#10Given that: 1. Some publicly traded companies have been sued for not maximizing shareholder value. 2. Not utilizing all of tax exempt vehicles provided to them could be counted as not maximizing shareholder value, unless of course there is a better investment they can make with their cash pile. 3. Given inflation of 1.5%, $100 billions in cash that Apple has would be losing $1.5 billions per year in terms of buying p…
But a share buyback has about 8x the predicted return.
Would require repatriation of money.