patrick.net

CL says

Hey FW,

What do you mean?

Large corporations don't typically allow cash to sit in the bank with no returns. So they invest a large portion of their revenue into the stock markets. Investment in the stock market generates return to shareholders (a lot more than cash in the bank). Plus they can avoid paying some taxes this way.

A quick example is that MSFT is a major shareholder of AAPL. There are millions of other examples.

Per the 10-K, MSFT has about 82B in cash and investment, about 8B is in common and preferred shares.

Most goes to fixed return instructment in government bonds and corporate bonds.

Having the benefit of reading 1000's of the 10-K, most public company stash their cash in fixed income (mostly a basket of short/medium/long government/corporate bonds), not equity. If they do stash it in equity, it is either strategic or represents a minor portion of the treasury.

SFace says

Most goes to fixed return instructment in government bonds and corporate bonds.

That makes sense. Liquidity and less volatility.

Companies would want to get out of these instruments quickly if they are going for strategic acquisitions.

uomo_senza_nome says

SFace says

Most goes to fixed return instructment in government bonds and corporate bonds.

That makes sense. Liquidity and less volatility.

Companies would want to get out of these instruments quickly if they are going for strategic acquisitions.

They also often invest and insure their investment. So it gets messy, but makes good returns for shareholders.

10yrT at 1.80,,,,,will they ever be this cheap again?