Big companies have big problems. While most entrepreneurs are trying to attract investment to start or scale a business, major companies are busy wondering where to put their money. Thus, Alphabet, one of the world’s largest companies by market capitalization, which owns Google, is "facing a new and, by most accounts, welcome problem — how to spend its rapidly expanding pile of cash,” Bloomberg writes.
In the second quarter, the company generated almost $29 billion in cash. As a result, that left Alphabet with cash and short-term marketable securities of nearly $118 billion. This amount is more than that of any other firm in the Nasdaq 100 index, except for Apple, which has about $167 billion. Unlike the iPhone maker, which seeks to return most of its capital to shareholders through share purchases and dividends, Alphabet does not have a clear capital return strategy as it never had to deal with that before.
Currently, Alphabet is actively implementing methods to reduce costs and prevent losses in its various projects. In this regard, the company has even announced a round of massive layoffs. However, this does not prevent investors from putting money. They mainly prefer companies that have large amounts of cash to invest with a view to gaining more revenue or returning to shareholders.
