IT companies keep tight grip on cash

Link: 2002 IT Budgets left unspent, says survey

According to the The Wall Street Journal, big IT companies have more than $87bn in cash between them.

Analysts think the companies plan to buy up their own stock to avoid having to shell out money on dividends. Shareholders are clamoring for dividends, which the technological giants are reluctant to fork out.

But according to the WSJ, holding onto the cash means the companies are growing slower than firms that pay more to shareholders, so the big tech companies could be keeping the industry depressed.

By not spending the money the companies are also not buying technology themselves which stimulates the industry.

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