The thing that immediately strikes me about Microsoft’s $44.6bn bid for Yahoo is that this is a good time for companies to have cash. Microsoft has so much that it can afford to offer Yahoo investors the money half in cash and half in shares, which is an impressive feat these days.
Actually, Microsoft’s cash pile at the end of last year was quite modest compared with the past. It had only $21bn in cash and short-term equivalents, compared with its peak of $64bn in September 2004, so it could not get out its wallet for the entire amount. Still that is hardly close to running an overdraft.