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Meta has ~$40B as Cash-on-Hand [1]. Why does it need to raise this money via bonds? [1] https://companiesmarketcap.com/meta-platforms/cash-on-hand https://comp
by devnull3 3y ago
Meta has ~$40B as Cash-on-Hand [1]. Why does it need to raise this money via bonds?
[1] https://companiesmarketcap.com/meta-platforms/cash-on-hand https://companiesmarketcap.com/meta-platforms/cash-on-hand
- rullelito 3y agoThis way they would not have to risk failing to issue a bonds at a later time.
- jjtheblunt 3y agoperhaps it has greater than $40B of expenses anticipated?
- mminer237 3y agoI can't find any solid information, but is it possible it's largely stuck in Ireland? By borrowing money and paying the interest with out-of-country cash, they should be able to avoid US tax, right?
- deleted 3y ago[deleted]
- brotoss 3y agolook up the interest tax shield
- musictubes 3y agoApple has been pursuing a “cash neutral” policy for a while by selling bonds in order to do what Meta says they are going to do. I’m no corporate financial whiz but I think that using debt to do those things has some sort of tax advantage. There also seems to be an effort to show a net zero cash holdings position in order to preempt any political attempts to try to take money that corporations are “just sitting on.” I think there was some rumblings of that when Apple had 100+ billion in the bank. When they got wind of various governments’ ideas of extra taxes on excess cash suddenly share buybacks seemed like a better idea than losing that money altogether.
- s1artibartfast 3y agoThey don't "need" to. They want to. They looked around and thought, we don't have much debt compared to other companies, I bet our company value would go down less than $7B if we offer a $7B bond. If they can give the $7B to investors today, but the stock value goes down less than $7B by taking it out, they are increasing shareholder profit.