bpchesney.org

While all major stock market indices are down 20 – 25 % from mid-January the NYSE-listed  companies with no long term debt  have held their cash position.  On January 11, these companies, cumulatively, had a little over $16 billion in cash and today they have a similar total.  The top 10 remains largely unchanged with Texas Instruments and Forest Labs separating themselves from the rest of the pack.

This would be a good time to buy other companies, if you can get the financing to make it happen.  In the pharmaceutical industry, Pfizer is attempting to buy Wyeth.  Today, Merck announced a cash and stock deal to purchase Schering-Plough backed by $8.5 billion from JP Morgan.  With market capitalizations falling and companies stock-piling cash, the amount of debt needed to finance a purchase is declining rapidly.

After looking at the healthy, profitable companies on the NYSE in contrast to the federal bailouts granted, I decided to look at the overall, aggregate state of cash and debt on the NYSE. Nearly half of the debt incurred by companies listed on the NYSE is held by 10 companies and about one third of the cash held by NYSE companies is concentrated in the hands of basically, the same 10 companies.

I decided to get a picture of the size of the federal bailouts for companies with unhealthy balance sheets in terms of companies that do have healthy balance sheets.  I turned to the New York Stock Exchange for a pool of various companies with accessible balance sheet information.

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