While every analyst with an Excel spreadsheet was demanding that they pay dividends, cloud czars Amazon (NASDAQ:AMZN) and Alphabet (NASDAQ:GOOGL) held firm.
It’s a tech tradition like no other. Tech companies husband cash when times are good so they can keep growing when times are tough. The joke is, “Dividends mean we don’t have anything better to do with the shareholders’ money.”
You can see it in Amazon’s first quarter report. Free cash flow was negative $18.1 billion for the 12 months ending in March. Yet Amazon had $15 billion in capital spending during the quarter. This was possible because it had over $66 billion in cash and marketable securities on its books at the end of the period.
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