Whats going on with blue chips spending all their dollars?

Discussion in 'Economics' started by peilthetraveler, Aug 30, 2010.

  1. Might just be a coincidence,but it seems all the big players are spending all their cash the last few weeks to buy assets and they are spending that cash fast. They dont seem to care about how much they pay for an asset, as long as they get it.

    Just today, 3m said they were going to acquire cogent for almost a billion dollars. Intel is spending 1.4 billion on a wireless chip company. HPQ and DELL are fighting over 3PAR (which looks like HP is going to get for 2 billion dollars). Not only that, HP just authorized a $10 billion dollar share buyback.

    What in the world is going on that all the big players are so quick to spend their cash recently? Is it just a coincidence, or do they know something?
  2. because its easier to manufacture earnings through financial manipulations then through actual sales.... They can keep the gig running until the musical chairs get taken away.

    Perhaps you might consider JNK puts.... OTM long dated.
  3. There's no internal growth here. Investors want growth. The only way for these companies to get growth right now is acquisitions.
  4. History shows that most buyouts don't work out well for the acquiring company... probably has something to do with the buyer CEO's pee-pee.
  5. zdreg


    empire building and the belief that cash is trash is the reason for the actions of CEOs.
  6. Well, it's difficult for CEOs to grow their own businesses due to lack of demand. They must be seen as "doing something" in order to justify their position and salary.

    Hopefully, we'll have a strong bout of deflation so that the T-Bonds and cash are king.. at least for a time... while the savvy pick up bargains.
  7. Investors are idiots. I would rather take a dividend payment. People used to buy stocks for the dividend growth and payments. Now its all casino.
  8. zdreg


    the savvy could be you if you determine ahead of time what the bargain is and then just do it when the times arrives. remember when the time
    comes it will be like all hell is breaking loose but do it anyway.

    eg; from deadbroke

    "2016 -2018 (bust started in 2005)

    Worldwide wave C down so we all go together. But who will be the lead horse in the eventual recovery?

    Here's 50 bucks on C H I N A

    I've got 5 locations worldwide where I'll buy in 2016-18 at 5-15 cents on the $ - and given the expected huge appreciation in the $ versus the currency in 4 of those locations, it will be even cheaper when I switch to local.

    In Santa Monica I've got my eye on an oceanfront rel. new, solid looking condo building. I plan to buy the entire top floor at shithouse prices.

    That's the plan.

    Go prices go, crash, crash, crash. I took the trouble to prepare when everyone gave me a fck of a hardtime. Only 4 listened and we're all going in together on the cleanup.
  9. S2007S


    Yea everyday it seems there is another merger or buyout, even private equity is stepping up their game.

    The reason behind this could be that there isn't any organic growth left for these big blue chips that future growth is only going to come through M & A.
  10. gimp570


    maybe someone else will swoop in and we could get a bidding war for Cogent COGT

    that would be nice...i like that its trading above the buyout price

    not sure if the deal is done or not

    but it seems to me that the price is low

    hoping for another 3par

    #10     Sep 3, 2010