The Wall Street Journal writes "Breaking the Buck on Corporate Cash Piles". It says, "Cash, besides being king, is seen as risk-free -- one of the few numbers usually taken at face value. Recent moves by some of America's biggest companies should force a rethink of that. At the end of 2013, S&P 500 companies had parked overseas $1.9 trillion of the profits they made outside the U.S., according to ISI Group, more than four times the level of a decade earlier. Excluding financial firms, the 232 companies that offer some disclosure on where their cash is located held $650 billion in cash and cash equivalents (such as short-term Treasurys) overseas. With 83% of that, the technology, health-care and industrial sectors dominate. That cash presents a problem: Because companies want to avoid a tax hit, many are loath to repatriate it, preventing them from returning it to shareholders or otherwise deploying it at home. Letting cash sit in the bank isn't very productive, though, especially when interest rates are so low.... That raises the risk of companies overpaying for deals or even just bringing cash home despite the tax hit. EBay, for example, last month said it would repatriate as much as $9 billion. Suddenly, investors had to factor in a $3 billion tax payment, equivalent to about 4% of eBay's apparent value evaporating. If investors aren't applying some sort of haircut to the valuations of companies with hefty amounts of cash overseas, perhaps they should be."
