Apple is no longer the company with the largest cash hoard. And it's good

Apple has long been known for holding a large cache of cash. For many years, the company even held the first place. However, now the situation is turning around and the company has started to spend more. It is thus replaced by direct competition on the ranking.

A Financial Times analysis reveals why a smaller supply of money is good. But first, let's talk about who replaced Apple in the imaginary ranking. It is the company Alphabet, which is the majority owner of Google.

Until recently, Apple had 163 billion dollars available. However, he gradually started investing and now holds about $102 billion in cash. Which is a decent $2017 billion drop from 61.

On the contrary, Alphabet constantly increased its reserves. During the same period, the cash of this company increased by 20 billion dollars to a total of 117 billion.

Tax relief also helped

Apple also managed to take advantage of one-time tax breaks. This allowed US corporations to get their overseas investments and cash taxed at 15,5% instead of the usual 35%.

In any case, investors evaluate the decrease in financial reserves positively. It means that the company spends more on research and development of new products, or returns them to shareholders in the form of dividends. It is precisely for the second mentioned point that Apple has often been the target of criticism in the past.

The change in leadership satisfied even the most prominent voices, such as Carl Icahn. For a long time, he drew attention to the fact that the company does not adequately reward its shareholders. Icahn was not alone in his protests, and Apple had a tendency to rile up its investors.

However, the pressure is still on. Walter Prince, who works as a portfolio manager at Allianz Global, is generally critical of the company's actions. In particular, he talks about unnecessary reinvention initiatives that have failed Apple. Unexpectedly, he would prefer to see more money flow towards shareholders.

But Apple bought back $18 billion worth of stock over the past 122 months. It bought back $17 billion worth of stock last quarter. So the critics can be satisfied. And the company thereby deposed itself from the throne of the king of financial reserves. Now the owner of Google will probably be pilloried for the same behavior.

Source: 9to5Mac