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Google acquires Apple to become the most cash-rich company



Google parent company Alphabet has persuaded Apple to become the world's most cash-rich company, reports The Financial Times this morning.


According to FT FT Apple's cash balance fell to $ 102 billion, down from a peak of $ 163 billion at the end of 2017. Meanwhile, Alphabet's cash reserve of $ 117 billion has risen by nearly $ 20 billion over the same period.

As FT notes, however, Alphabet's new title as "king of cash" may be something of a poisoned lime, as it may discourage investors who would rather see the cash being used to reward shareholders with the repurchase or dividends.

The change of leadership is said to be a result of Apple's own efforts to reduce liquidity by taking advantage of US tax reform to repatriate foreign reserves and pay out to investors. The company has spent $ 1

22 billion buying back shares and paying dividends over the past 18 months.

Alphabet's share buyback, on the other hand, has been small. Over the nearly four years since it began buying back its own stock, it has spent an average of just $ 1.7 billion this quarter.

At that time, it has distributed more new shares in the form of employee share benefits than it has repurchased through the buy-back program. As a result, payments have done nothing to raise earnings per share – the reason investors generally want buybacks.

Alphabet's new cash-rich status also comes at a time when it is under more intense scrutiny than ever before. Google and the parent company have received over $ 9 billion in antitrust fines by the EU over the past two years. It is now facing a new antitrust investigation by the Ministry of Justice.

Alphabet's cash reserves have actually increased despite the parent company's heavy investment in real estate for new office buildings and data centers, which will form part of the infrastructure that supports Google's growing AI endeavors.

When it comes to the most valuable company on the planet, Apple has been overtaken by both Amazon and Microsoft, and the latter is now taking the penny. Microsoft is now worth nearly $ 1.1 trillion, rising on the back of optimism surrounding the cloud business.


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