Only Microsoft and Cisco have a bigger holding among non-financials in S$P 500
David Wilson. New York
Google Inc has piled up too much cash for its own good and out to start buying back shares, according to Clayton F Moran, a Benchmark Co analyst.
Google, the owner of the world's most popular Internet search site, finished the second quarter with $30.1 billion in cash. Only Microsoft and Cisco Systems have a bigger holding among non-financial companies in the Standard & Poor's 500 Index , according to data compiled by Bloomberg.
Google's cash amounted to 21% of its market value on June 30.
"We view this hoarding of cash as inefficient," Moran wrote on Monday in a report. "It's a drag on earnings growth." The company ought to repurchase "a sizable chunk" of its stock through a so-called Dutch auction, in which shareholders specify the price they would accept within a set rage, he wrote.
Google's only buyback bid was made in November 2004, a month after going public, to current and former employees and consultants who may have received stock improperly. None of the 23.4 million eligible shares was repurchased.
"We have mace no decisions at all on share buybacks," CFO Patrick Pichette call that followed Google's release of second-quarter earnings, "It's a topic that's regularly debated."
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