Google (Nasdaq:GOOG) announced that they are now buying securitized bonds of car loans. Trying to get more yield on cash is noble. The step out on the risk curve is ridiculous. Google investors have no interest in securitized car loan debt. I know the default rate has much improved but that should not be the deciding factor.
Google you are a tech company not a financial institution. what you have here is a classic supply chain problem. Too much cash and no clear market opportunities. That is the poker tell for Google. They do not have enough good idea’s in the technology space.
The cash positions are becoming so large small incremental yields will start to be factors in EPS.
Google you have to giddy up.
George Gutowski writes from a caveat emptor perspective.
- Google Speeding Ticket at FTC only $22.5 million. Take It Out Of Petty Cash.$GOOG (financialskeptic.wordpress.com)
- Auto loan rates in Toledo, Ohio (bankrate.com)