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Apple, Microsoft and Google Hold 23% Of All US Corporate Cash Outside the Finance Sector (geekwire.com)
An anonymous reader writes: Apple, Microsoft, and Google are the top three cash-rich U.S. companies across all sectors of business, not including banks and other financial institutions -- holding a combined $391 billion in cash as of the end of 2015, or more than 23 percent of the entire $1.68 trillion held by the nation's non-financial corporations. Apple leads the pack with $215.7 billion in cash, followed by Microsoft at $102.6 billion, and Google at $73.1 billion. The numbers are documented in a new report from Moody's Investors Service that shows an unprecedented concentration of cash in the tech sector. For the first time, the top five companies on the Moody's cash ranking are tech companies, with Cisco and Oracle following Apple, Microsoft, and Google. Technology companies overall held $777 billion in cash, or 46 percent of the total cash across all non-financial industries.
Are there any longer term data on the nature of their cash holdings -- ie, has this amount increased over time or is it fairly static?
I'm also curious about the economic impact of cash hoarding like this. Presumably having this much capital tied up in short-term non-working assets is suboptimal in a macroeconomic sense.
My understanding is that it mostly gets parked in high liquidity accounts and instruments, and that even banks have begun charging negative interest rates on large deposits because the short term nature and liquidity demands prevent them from being able to use it as capital.
I'm also curious how shareholders feel about this. It would seem kind of obnoxious for a corporation to hoard cash that could be paid out as dividends. Obviously some amount of cash (even relatively large) is a good idea for future investments and acquisitions, but maybe not at the levels shown here.
In the USA, there was never a 90% tax rate on corporate profits, even if you consider the double taxation on dividends. Besides, these are cash holdings, meaning that the companies already paid their f***ing taxes in the process of acquiring the cash.
These companies aren't obstructing economic growth. The Federal Reserve has effectively destroyed the interest rates on cash and cash equivalents for the express purpose of forcing people into more risky investments. If there were positive returns to be had by increasing capacity or making new investments, these companies would most certainly be taking advantage of them. It's not like there's a surplus of new and promising business ventures out there which are starved for cash.
Government policy has ground this economy to a halt by rewarding "financialization" and trying to cure a debt-based recession by doing everything possible to increase outstanding debt.