Thursday, May 7, 2015

(C.R.E.A.M.) Cash Rules Everything Around Menlo Park

[M]any of America's biggest technology firms are rolling in money: Microsoft, for one, has $95 billion in cash and short-term investments on its balance sheet. Among the top ten American firms with the largest cash hoards (excluding financial firms), six are technology firms, led by Apple, and they have saved up a combined $485 billion. This, plus their high share prices, gives the tech industry's potential predators unprecedented firepower as they go hunting. 
"Eat or be eaten." The Economist, May 9th-15th 2015, Accessed May 7, 2015, http://www.economist.com/news/business/21650559-wave-consolidation-prospect-americas-big-internet-firms-look-set-divide

Some popular tech firms, among them Twitter and LinkedIn, have recently posted weak earnings reports. They may be susceptible to a buyout from a cash rich peer like Facebook or Google. As such they're probably hoping that their more fortunate competitors, if a buyout is indeed imminent, are, measure for measure, less Angelo than Isabella who reminds us that "it is excellent to have a giant's strength, but tyrannous to use it like a giant."

No comments:

Post a Comment