Alphabet Has Overtaken Apple to become the Richest Liquid-Cash Company

Aug 15, 2019 by CharismaticMannequin
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Remember a few years ago when news came out that Apple had hundreds of billions of cash on hand? That’s still the case, but they’re no longer top dog. Google’s parent company, Alphabet, is now on top, with $117 billion in cash. 

Apple isn’t too far behind with $102 billion. While it’s a vast sum of money to have lying around, many are already suspecting that shareholders will want to see a chunk of that cash go into their own pocket, in the form of buybacks or dividends. That’s not to mention the possibly increased scrutiny the company might face as it stores such large quantities of money.

“Google and its parent company have been hit with €8.2 billion (around $9.05 billion) in antitrust fines by the EU in the past two years, and the company is also facing heavy scrutiny by US lawmakers.

Apple played a significant role in the change in leadership by actively reducing its liquidity. Since 2017, the iPhone manufacturer’s reserves have fallen by $61 billion from its $163 billion peak, with Apple taking advantage of US tax reforms to repatriate overseas reserves and pay it out to investors. Meanwhile, Alphabet’s cash reserves have risen by $20 billion over the same period, despite heavy investment in real estate as the company buys up space for offices and data centers.” (The Verge)

According to The Verge’s article, Microsoft is still the most valuable company overall, being the only company with a market cap currently above $1 trillion. Will we see Alphabet’s cash reserves deplete over the coming months and years, as shareholders seek their piece of the pie? Morever, is there a valuable reason why Google’s parent company is holding onto so much money, particularly given liquid cash’s tendency to lose value over time? 

What do you think? Have insights into the situation? Share your comments below.

 

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