Alphabet's Cash Conundrum

Alphabet's Cash Conundrum

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  • Alphabet Inc. is encountering a fresh challenge — the dilemma of efficiently utilizing its swiftly growing cash reserve. During the second quarter, the parent company of Google accumulated almost $29 billion in cash. This came after implementing workforce reductions and strategies to mitigate losses in its experimental ventures.
  • Consequently, Alphabet now possesses approximately $118 billion in cash and short-term marketable securities. Remarkably, this sum surpasses the holdings of all other companies listed in the Nasdaq 100 Stock Index except for Apple Inc., which maintains around $167 billion. 

Why it matters

Alphabet ramped up share buybacks and expanded its repurchase authorization to $70 billion in April. However, the company spent just $15 billion buying back its shares, which is barely half of the cash it brought in. In contrast to Apple's intention of returning a significant portion of its cash to shareholders through stock repurchases and dividends, Alphabet's approach to capital distribution is less well-defined. This has led investors to look for more comprehensive information regarding the company's strategies and intentions.


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