SI
SI
discoversearch

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor.  We ask that you disable ad blocking while on Silicon Investor in the best interests of our community.  If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.
Pastimes : Clown-Free Zone... sorry, no clowns allowed
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  
To: GraceZ who wrote (146187)1/25/2002 2:16:46 PM
From: reaper   of 436258
 
I had no illusions that you were singing the praises of KMart as an investment. But you DID say (or at least implied) that KMart was significantly LESS leveraged than Amazon, which I do not believe to be the case. KMart has itself been an "operating bankruptcy" (I like that; thank you) for at least 3 years, and finally their various stakeholders (vendors to whom they owe money, landlords, traditional debt holders) have decided to call in their chips.

Which of course begs the question, when will Amazon's chips get called?? That is entirely unclear. Their debt carries a pretty low interest rate and the principal is not due for several years, so they are OK here. BUT, they operate VERY closely to a current-account deficit, meaning basically that they are financing their business via the balance sheets of their suppliers. IF these suppliers ever got nervous about getting paid back, the gig would likely be up immediately and Amazon would basically stop operating. As of TODAY, I don't think those vendors should be nervous. In a year.......Basically Amazon has devolved to a big confidence game at this point. And with the debt trading at 50 cents on the dollar, one of the legs of the confidence stool (debtholders, suppliers, equity holders) is already broken.

See my discussion w/ Sun about these issues a couple months ago

Message 16852416

Cheers
Report TOU ViolationShare This Post
 Public ReplyPrvt ReplyMark as Last ReadFilePrevious 10Next 10PreviousNext  

HomeMailHotSubjectMarksPeopleMarksKeepersSettings
Terms Of UseContact UsCopyright/IP PolicyPrivacy PolicyAbout UsFAQAdvertise on SI
© 2025 Knight Sac Media.  Data provided by Twelve Data, Alpha Vantage, and CityFALCON News