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Returning money would create inflation for acquiring future cash cows (think : firebase) Imagine, if Google returned money then investor gets the money and now
by gingabriska 7y ago
Returning money would create inflation for acquiring future cash cows (think : firebase)
Imagine, if Google returned money then investor gets the money and now they try to invest it somewhere else, highly likely, these guys will go after companies which Google want to buy out. Why make it expensive for yourself to buy your threats?
The idea is that investment opportunities are shrinking, more money in market for limited opportunity is what creates inflation, makes it expensive for everyone to acquire new companies.
It's specially true for big tech companies where pension funds and other investment fund own large chunk of stock, if they get the money, they'll put it in venture capital or private equity which either increases cost to acquire technology (patents etc...) Or existing businesses.
- docker_up 7y agoGoogle has already created inflation from their stock price. The houses in the Bay Area have doubled in 5 years precisely because FANG engineers have had their shares skyrocket 6-10x, so they buy multiple houses.
- gingabriska 7y agoI am not talking about this kind of inflation. I am talking specifically about inflation for purchasing future cash cows.