Apple has been at the top when it comes to the most cash-rich companies in the world. Well, Apple has to left this seat as another company is going to take that throne.
According to a report from Financial Times, Google’s parent company, Alphabet has taken the spot of the most cash-rich company in the world.
The corporate world has a new king of cash. The title for the company with the biggest financial reserves, held by Apple for a decade, has passed to Google’s parent, Alphabet, according to figures released in recent days […]
Apple’s holdings of cash and marketable securities, net of debt, has fallen to $102bn, down from a peak of $163bn at the end of 2017. Alphabet’s financial reserves have been moving in the opposite direction. At $117bn, its cash pile has risen by almost $20bn over the same period.
Apple brought back a huge chunk of cash from its overseas cash taking benefit of the one-time corporate tax break which allows companies to bring cash back to the US by paying only 15.5% tax rather than the normal 35%.
Apple had been criticized to hold cash as investors see this as wasted money, it should be put to work in R&D or as investment in new projects.
The switch in leadership follows a concerted effort by the iPhone maker to reduce its liquid reserves, six years after it first came under pressure from activist investor Carl Icahn to pay out more of its cash hoard.
The company’s preference for hoarding its money and spending it on trying to break into new markets, rather than using it to reward shareholders with buybacks or dividends, as Apple has done, also antagonises some investors.
“In general, their attempts to reinvent themselves with their new initiatives aren’t working out,” said Walter Price, a portfolio manager at Allianz Global Investors. “I wish they’d return more cash to shareholders and waste less.”
Should be mentioned here that Apple spent over $122 billion in stock buybacks out of which $17 billion was spent in just the last quarter.