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Is This Why Corporate America Won’t Spend Its Cash?

    • Maybe if they uped div’s stock wouldn’t drop as much. Plan B buy back stock. Or is it political?

    • Give it to the share holders, they will spend it!

    • This article doesn’t make a lot of sense. Corporations aren’t spending money because their stock prices are down this month?

      It is more likely that they are not seeing a lot of investment opportunities right now and so they are sitting on the cash.

    • The article suggest the lost in market cap is due to their cash build up, but is it really so?

    • Much of the cash is trapped overseas to avoid taxation. They should use the cash to buy a foreign business, and then spin the business off to their shareholders. The only loser is the American taxpayer, but hey, we’re used to that… that’s why we elect the politicians that we do. ;)

    • They are doing what big corps do wait for the fed to let off the gas on the short end of the curve and then buy everything up with pennies on the bust…story of the last 100 years they aren’t dumb the fed chairman is hot money searches for yeild and they don’t see very much of it…

    • What does it say when market caps are so low . . . and they won’t even repurchase their own stock? They aren’t buying other companies, I would guess, because nobody wants to sell in this depressed market. But what about their own stock? If they think their caps are unreasonably low, wouldn’t they be a steal?

    • Corporate America is waiting for the other shoe to drop in this uncertain economy.Especially with the ending of QE2,all want to be in some level of control and leverage if any opportunities arise or if conditions get worse which I suspect will.

    • It certainly makes sense for any company who may be looking around for bargains in this environment to sit on the cash. “All stock” transactions with their own market caps shrunk would be less attractive than one which mobilizes some of that dormant cash.

    • Companies want revenue they need to sell products or services. People need money to buy their products or services. Jobs pay people money in exchange for work. People THEN HAVE MONEY TO PRCHASE PRODUCTS OR SERVICES. FROM THE COMPANIES.
      Instead of adding it to their bottom line and locking the money in their vaults they need to HIRE PEOPLE TO WORK FOR THEIR COMPANIES. Whatever their current staff is they need to step up and hire 10% more people. They will spend their paychecks for sure. Companies will increase their bottom line by adding revenue, NOT BY SELLING THEIR STOCK TO THE INVESTMENT WORLD. And get the country back on its feet at the same time
      Basic household economics. .

    • Its a sign of excess corporate profits. If the free market was working – wouldn’t competition step in and reduce the excess profits?

    • The unemployment rate is way higher than the official rate. Just go to the Gallup Poll website. So should companies hire for no immediate reason? Of course not, but they should create the reason. Top management gets payed to just sit on huge cash reserves while sitting on their thumbs doing nothing? Is that what a Harvard MBA teaches them? Just like routine layoffs to fix the balance sheet. Anyone could do that, no MBA required. I remember reading the WS Journal reporting Jack Welch laid off something like 20-30k employees at GE. And this guy is celebrated as a great business leader? You need an MBA to do that? The challenge is balancing the books AND keeping your employees, especially the ones who have been with you for a long time. Now the business challenge is spending your reserves by hiring for a reason. Go into new markets, expand your present ones, do something! It’s a case study that all companies are failing.

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