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A lot of those oversized cash accounts can be explained by corporate tax structures that hold cash overseas in subsidiaries. Repatriation of that cash would inc
by slv77 11y ago
A lot of those oversized cash accounts can be explained by corporate tax structures that hold cash overseas in subsidiaries. Repatriation of that cash would incur significant penalties.
Pundits also suggest that shareholders who should be the beneficiaries of the cash through dividends are content to let CEO's and boards invest the cash for them due to a lack of other compelling investment opportunities.
Cynics might say with the prevalence of index and other funds who hold shares by proxy and who tend to vote with corporate management there is little pressure for CEOs or Boards to return funds to shareholders and instead hold them as a personal insurance policy and to extend their power base.
- ChuckMcM 11y agoThat is certainly a big part of it. But fundamentally it is idle capital. Why doesn't Apple build a German development center? I'm sure they could fill it with solid engineers and they could make it close to the auto centers and put their self driving electric car project there. Or pretty much anywhere in the EU. No need to repatriate funds if you can invest them in the area where they are already sitting and repatriate them as engineering expertise work items.
- slv77 11y agoI'd be surprised if there was a large contingent of unemployed machine learning specialist sitting idle in Germany waiting for Apples investment dollars to unleash them. A billion dollars or even ten billion won't materilize the required skills in the requisite time. An economist suggests this is an example of a skills mismatch.