Excess cash on the balance sheet is wealth destruction

Many of the largest technology companies are making so much money that they are rapidly accumulating cash on their balance sheets. While one could argue that this cash should be stripped off the balance sheet for valuation purposes, I would argue that the cash is worth less than face value because having excess cash on the balance sheet is an invitation to wealth-destroying acquisitions. The excess cash should be returned to shareholders as quickly as possible in the form of dividends or share buybacks to prevent such an outcome.
First, there are the technology companies and their cash. Let's look at a few of these cases.

Cisco Systems had total assets of $92.6bn at the end of October. Of that total, $45bn was cash and short-term investments, $3.7bn was long-term investments, another $20....


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