Less than a week ago, Microsoft shook the acquisition market with the purchase of Activision for 68.7 billion dollars, about 60.6 billion euros. Microsoft has chosen to make the purchase in cash, that is, without having to resort to bank financing or issuing debt, and using the liquidity of its balance sheet. At the end of September, the company led by Satya Nadella had a treasury – both cash and very short-term lines of credit, less than three months – of 130,615 million dollars, some 115,250 million euros at exchange rate.
A figure that rises to 605,055 million dollars (533,880 million euros) if the treasury also amassed by Apple, Amazon, Meta (Facebook) and Alphabet (Google) are included. Amount that, despite the turbulence caused by the pandemic, has risen 13% in the last three years, and that would allow these five companies to go shopping, if they wanted to, in style. In the Spanish Stock Exchange they could jointly buy about 90% of the Ibex tocateja and take over Inditex, Iberdrola, Santander, Cellnex… At the close of Friday, the market value of the 35 Ibex companies reached 585,000 million euros.
These companies have increased their treasury by 13% in three years
In the event that they prefer to opt for their European competitors, the five great American technology companies could take over 70% of the technology sector of the Stoxx 600, which includes among the companies with the largest capitalization the semiconductor company ASML, with 256,000 million, or Prosus, the Dutch internet business giant, with 159 billion.
American companies, and especially the big technology ones, often have high cash buffers. That is, both cash and very short-term lines of credit, less than three months. A good part of that liquidity derives from the strong generation of income that they make outside the United States. The arrival of Donald Trump to the White House meant a tax cut for companies that allowed companies with strong business profits generated outside the country to repatriate part of that cash, paying much less tax for it.
Companies tend to use this treasury to distribute dividends, make purchases and investments, repay debt or acquire their own shares on the market –buyback plans–, which are a widespread way of pampering shareholders among US listed companies that do not offer a dividend yield as high as the European stock market.
Among the five big technology companies, Apple is the one with the most cash, 189,961 million dollars (167,610 million euros). The company founded by Steve Jobs has 34,940 million dollars in cash and equivalents. It also has $22.878 million in US Treasury debt and another $20.201 million in non-US government debt.
It is followed by Google’s parent company, Alphabet, with a treasury that rises to 142,003 million dollars (125,300 million euros), which, according to its accounts, is made up of cash and negotiable securities, such as bank deposits, US public debt US and mortgage- and asset-backed securities, as well as stocks.
Amazon and Facebook occupy the last positions. The electronic commerce giant accumulates 74,470 million euros in cash, of which 8,800 million are in cash. Meanwhile, the recently baptized as Meta adds a treasury of 51,250 million euros.
Apple and Alphabet add 52,000 million euros in cash
Faced with the enormous liquidity accumulated by these five large companies, the Ibex firms added a much more moderate anti-crisis cushion at the end of the third quarter of the year. Among all non-financial companies, they were close to 100,000 million euros.
Of these, the one that enjoys the greatest liquidity was Telefónica, which at the end of September had 18,926 million, an amount 24.6% higher than that registered at the end of 2020. It was followed by Repsol, with some 10,000 million in liquidity, and Cellnex, with some 9,500 million, 55.7% more than in December 2020.
Pressure on the stock market for the sector in the middle of the earnings season
Netflix. The Wall Street listed companies are already in the middle of the results presentation campaign, with investors scrutinizing their forecasts for the coming quarters. Last week the Nasdaq left 7.55% penalized by the rebound in sovereign debt yields, given the withdrawal of stimuli by the Fed, and doubts about Netflix which, despite earning twice as much as a year before, it gave a forecast of subscribers that was punished by the market. Its titles fell 21.8% in the day on Friday.
Calendar. This Tuesday the 25th you will have to portray your Microsoft accounts, just one week after announcing the purchase of Activision. On Thursday the 27th it will be the turn of Apple, which in the previous quarter warned that interruptions in the supply chain had had an impact on the company of 6,000 million dollars. In the following week, Alphabet will publish its accounts on February 1. One day later it will be Meta’s turn and the next it will be Amazon’s turn to account to analysts and investors.
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