Tech companies hoarding cash – Back of the Envelope #003

What’s up with tech-companies building up huge piles of cash? We talk about those big piles of cash tech companies are hoarding in episode #3 of the Back of the Envelope podcast. Along the way we end up talking about corporate and investing financial fundamentals as always. As always, I’m joined by co-host Ed Goodwin (@egoodwintx). Pardon my “breathy talking,” I must have been climbing a flight of stairs as I recorded this:

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Show Notes

• Nassim Nicholas Taleb‘s magic, retro web page and his new book of aphorisms, The Bed of Procrustes.
• Piles of cash at tech companies (here, here, and here on Apple), and optimal finance structures.
• Why tech companies hold onto piles of cash: being debt/risk averse, shelter from bad economic times, holding onto it for future opportunities.
• The other side: I want my money “working,” not just sitting there. If you’re not doing something with the money, I could be doing something better with it.
• We also discuss cash repatriation and how avoiding taxes drives financial strategy.
• Also: “I mean, basically,the world’s someone’s restroom.”

Since Ed works in a highly regulated job as a portfolio manager, his lawyers require this exciting disclaimer, which you’ll get to hear my friend Charles Lowell read at the beginning of the episode:

This podcast is for entertainment purposes only. The content and opinions expressed in this podcast are merely the opinions and observations of Mr. Goodwin and Mr. Cote. Michael Cote is a technology analyst who may have conflicts of interest concerning the companies mentioned. Ed Goodwin is an investment adviser to various funds that may have a financial interest in any companies mentioned. This podcast should not be construed as investment advice of any kind. Both Mr. Goodwin and Mr. Cote may be buying or selling any of the securities mentioned at any time; either for themselves or on behalf of clients of theirs. The content herein is intended solely for entertainment purposes only. This podcast is not a solicitation of business; all inquiries will be ignored.

Seriously, don’t rely on this podcast for investment advice. Ever.

Now sit back and enjoy the show.

Disclosure: see the list of RedMonk clients for clients mentioned.