What Tech Companies Should Do With Their Cash

from the buy-buy-buy dept

There’s been a lot of debate over the past few months concerning the tech companies that have a ton of cash on hand. The cash is earning next to nothing, but paying it out to shareholders doesn’t necessarily make sense, since most of the companies expect to keep growing in the future. They also can’t spend the money on operations, since that looks bad on Wall Street – especially when they’ve been so focused on cost cutting the last two years. So, the prediction is that it will go towards acquisitions of other companies. These tech companies no longer have inflated stock funny money to buy other companies, but they can use cash instead. Company valuations are (relatively) low, and cash rich companies are likely to see this as an opportunity to reposition themselves for the future. So, the consolidation trend will continue, but for different reasons than in the past.

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