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Comment by robryan | Hacker News Reader

It's probably likely that they make a better return on their cash management than the rate on these bonds?

The point is that Google already has $37B in liquid assets, which are unlikely to yield more than 3.7% returns. As a point of reference 10yr US treasury bonds only return 3.3% and are definitely illiquid; 1 Tbonds return only 0.22%. I haven’t heard of any current liquid asset yielding anything near 3.7%.

If they really have investment opportunities that they are convinced will surpass 3.7% return, why aren’t they just using their existing liquid assets. I agree with other commenters that these funds are either in preparation for a large acquisition or just a dumb decision resulting from irrational and inefficient buracracy common to all large companies.

As mentioned elsewhere in this thread it's likely because a significant portion of that $37B is overseas and cannot be brought back into the US without paying US taxes on it. It's quite likely cheaper to take out a bond to raise more money in the US rather than bring overseas cash into the US.

So Google is operating a hedge fund now?

Most large companies do.

Kinda. There are too many legal implications to be a real hedge fund, but they do actively manage their own cash. When you have that much money you don't just plop it into a savings account.

http://www.businessweek.com/magazine/content/10_23/b41810335...

With the odd pursuits they attend to such as self driving cars, why not finance?

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