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chuck_portis t1_je7zke2 wrote

Microsoft, Google, Apple and Amazon run the best businesses in the world. They are never at risk of bankruptcy. They attract the best talent in the planet. Literally the top grads from every country. The smaller companies who were able to compete in 2021 no longer have access to capital. Big Tech is so flush with cash, they can still do whatever they want.

High interest rates impact smaller companies much worse than Big Tech. Big Tech is self-sufficient from their existing cash cow businesses. The odds that a small company can challenge them is much lower in this environment, since they have become so starved for capital.

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2conservative t1_jeavcmn wrote

Its all about the debt they carry. Or return they are getting on other long term assets. For instance, the banks are in trouble for multiple reasons but investing in long term bonds at 3% and then having the FEDs jack rates up to 7% - that wasn't good for their bottom line. Also fixed mortgages at 3.25% - they are losing money on those now. Might be one of the reasons Wells Fargo said they were exiting the Mortgage business a few months ago. A year ago, carrying debt was smart and all the big companies did it (why not at 1 or 2%). That is cheap and allows them to use cash for more productive purposes. From Google:

How Much Debt Does Apple Carry? The image below, which you can click on for greater detail, shows that Apple had debt of US$111.1b at the end of December 2022, a reduction from US$122.8b over a year.

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EdliA t1_jee5bgr wrote

Yet these same companies laid off a lot of people. There was a reason for that.

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