<![CDATA[Turns out Google also owns $259.6 million in securities no one will buy - Valleywag Comments]]> <![CDATA[Turns out Google also owns $259.6 million in securities no one will buy - Valleywag Comments]]> <![CDATA[Turns out Google also owns $259.6 million in securities no one will buy]]> I've gathered that it was a method of investing your excess liquidity in a manner that would have a high payoff, and it was "guaranteed money!!!" as long as credit confidence and lending remained high. There was virtually no risk! Unless the economy slumped... and then it did.

ludwigk

]]> <![CDATA[Turns out Google also owns $259.6 million in securities no one will buy]]> To boil it down, because dutch auctions are a bit funky, an auction rate security is a long term debt instrument that is (in theory) traded in and out in a short term market (say every 7 days, or once a month).

Companies, such as Google, bought into these securities under the assumption that they could resell them at the time of the next auction. Trouble is, people aren't buying them now that the credit market is tighter.

Don't be such a damned sensationalist. Google didn't piss the money away. They're stuck holding long term debt, when they were sold on the idea it was a short term instrument. They haven't lost money on it.

The real story is with startups that had the majority of their cash reserves locked up because a money manager didn't think the thing through.

gcboston

]]> <![CDATA[Turns out Google also owns $259.6 million in securities no one will buy]]> What is an auction-rate security?

Jordan Golson

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