U.S. companies are sitting on at least US$2 trillion of cash, with a quarter of it concentrated in a few top tech companies, according to Moody’s Investor Service. The top five cash holders in Moody’s 2022 survey were Apple, Meta, Amazon, Microsoft and Alphabet.
For example, in the just completed first quarter, even amid all of the volatility that accompanied the banking crisis, Apple posted a 27% return, notes Apple 3.0 (a subscription is required to read the article).
From Apple 3.0: For most major companies, the first major point to make it that cash management, for good or ill, has only limited effect on their operations. Taking the bank example, depositors may run if they think an institution is in trouble, as we just saw. Few will likely decline to buy an iPhone, for example, if Apple one day loses money on bonds. There’s no such thing in industrial companies as a run on the bank: If the value of bonds that Tesla owns drops, for example, it won’t be forced to repay customers who have owned a Model X for years, the way banks have had to pay off depositors who want out.
