Google Borrows $3 Billion

[Guest]

Google has made its debut in the U.S. bond market and issued $3 billion in 3-year, 5-year and 10-year notes.

Google Borrows $3 Billion : Read more

 

[Guest]

Thats what happens when BANKS have less than 10% of money. Our system will collapse soon!

https/www.cia.gov/library/publications/the-world-factbook/rankorder/2187rank.html

 

[chindoboi]

They probably only have debt to reduce taxation costs on income earnt....

 

[spentshells]

Scams legalized through lawyers total bulloney

 

[internetlad]

back the fun bus up, the solution to their debt is to get into debt?

makes sense to me!

 

[nebun]

i guess that google is not doing so well after all, lol....everyone is getting themselves into bigger debt...wtf AMERICA

 

[mman74]

[citation][nom]internetlad[/nom]back the fun bus up, the solution to their debt is to get into debt?makes sense to me![/citation]

That statement makes no sense to me. You are already in debt.
Being in debt is not an issue, you can't do business without incurring debt. Every business has debt and besides, their capital valuation makes 3 billion looks like peanuts. What is important is that you ensure you have cash to operate because you ae a very profitable business, so what you do is you service that debt in the most manageable way possible. Owing out to a bond is much easier to manage than owing out to someone who wants their cash back tomorrow.

 

[Guest]

what is this? Tom's become a free place for advertising stuffs?

 

[aevm]

[citation][nom]internetlad[/nom]back the fun bus up, the solution to their debt is to get into debt?makes sense to me![/citation]

I think it's just a refinancing. It's like you getting a new credit card with a lower rate and transferring the debt from the old credit card. You still owe the same amount but now you pay less interest. Or like somebody replacing a fixed-interest mortgage with another one for the same amount when interest rates are lower. It's a pretty common thing, actually.

 

[eddieroolz]

I was under impression Google would've had $3bil in bank, but I was wrong?

 

[weskurtz81]

After reading some of the comments I had to chime in. Some of you obviously have NO CLUE as to why, at times, businesses will borrow instead of spend the cash they have.

If you actually READ the article, and understood it, you will see that Google has roughly $38 Billion in CASH AND SECURITIES and $2 Billion in debt. They don't NEED to have the debt, but it might make more sense for them financially based on what they are currently doing or planning on doing.

 

[nezzymighty]

"... Despite its high profitability of about $11 billion per year as well as a free cash-flow of $7 billion and nearly $38 billion in cash and securities, Google currently actually has about $2 billion of commercial paper debt, which is somewhat unusual for a large high-tech company, but more common for more traditional industries."

How is this "..unusual.." if one benefit of issuing commercial paper is saving money, for example, let's say it's 5 basis points, over going directly to whatever financial institution you prefer. Is saving money, in the case of 5 basis points on 2 billion is a huge savings, "... unusual.."?

Some questions people have asked, in a round about way, is why would Google take on debt, if they have cash in the bank? the answer is... the weighted average cost of capital... ohh taxes taxes taxes... I new my MBA would pay off eventually....

 

[COLGeek]

Don't confuse this action with Google not doing well. One has nothing to do with the other. This is just a way to use someone else's money (rather inexpensively) to get something done. Really nothing more than an accounting ploy to save long term costs.

 

[pale paladin]

guys this is just a debt consolidation and restructure. It's basically moving a debt to a lower interest credit card. The rest of what is borrowed will be used to make money. getting an A in advanced business calculus payed off. woot. If i could see the numbers I could write a function representing the difference in interest payed based on rates. College FTW

 

[Guest]

@NezzyMighty

You _knew_ your MBA would pay off, huh?

Well, apparently you did not spend too much time in English classes.
It is "knew" not "new".

"I new my MBA would pay off eventually...."

 

[fir_ser]

So Google is technically replacing an expensive debt with another cheaper debt.