> The investment requirements are so large that equity financing alone won’t do. The balance sheets of many of the major players have been altered significantly. Looking at Meta’s annual statement before ChatGPT was released to the public in November 2022, it had over three times as much cash as debt on its balance sheet. Last quarter it had 15% more debt. Microsoft had 30% more cash than debt pre-ChatGPT. Now it has almost 20% more debt. Amazon, which has traditionally had a more leveraged balance sheet, now has over 50% more debt than cash
I was still under the impression that all the faangs had more cash than liabilities, I wasn’t aware that had flipped
Seems like there's lots of warnings about equity bubbles, bond/debt problems, economic issues that will affect inflation (UK/EU), and gold is mega high. Seems like everywhere you look it's doom?
It’s the new flight to safety after gold.
Good luck with that strategy.
Also, past performance is not an indicator of future performance. Hindsight is always 20/20.
I don’t, but too many people do :)
Especially cash. Maybe/likely the US Fed will pump trillions of new dollars into the economy in random places and cause massive inflation.
So let's say we hold 25% cash, or even 50% cash. We still have to allocate the other 50-75% somewhere. Where?
Who cares if there is a bubble or not. The world economy will still grow.
also really surprised that tech companies have more debt than cash on hand. would be really interesting to know how apple fares in this comparison too.
zerosizedweasle•1mo ago