This is from the recent 10Q:
"
OUR SIGNIFICANT AMOUNT OF INDEBTEDNESS COULD AFFECT OUR BUSINESS
We have significant indebtedness. As of June 30, 2000, we had
indebtedness under senior discount notes, convertible notes, capitalized lease
obligations and other asset financings totaling approximately $2.15 billion. We
may incur substantial additional debt in the future. Our indebtedness could:
- make it difficult to make principal and interest payments on our
debt,
- make it difficult to obtain necessary additional financing for
working capital, capital expenditures, debt service requirements or
other purposes in the future,
- limit our flexibility in planning for, or reacting to, changes in
our business and competition, and
- make it more difficult for us to react in the event of an economic
downturn.
We may not be able to meet our debt service obligations. If our cash flow is
inadequate to meet our obligations, we may face substantial liquidity problems.
If we are unable to generate sufficient cash flow or obtain funds for required
payments, or if we fail to comply with other covenants in our indebtedness, we
will be in default. This would permit our creditors to accelerate the maturity
of our indebtedness. In addition, our PEACS are denominated in euros, not
dollars, and the exchange ratio between the euro and the dollar is not fixed by
the indenture governing the PEACS. Therefore, fluctuations in the euro/dollar
exchange ratio may adversely affect us, including by impacting the conversion.
WE CANNOT ACCURATELY FORECAST REVENUES OF OUR BUSINESS. WE MAY EXPERIENCE
SIGNIFICANT FLUCTUATIONS IN OUR QUARTERLY OPERATING RESULTS. OUR BUSINESS IS
SUBJECT TO SEASONAL FLUCTUATION. FUTURE FLUCTUATIONS IN OPERATING RESULTS OR
REVENUE SHORTFALLS COULD ADVERSELY AFFECT OUR SUCCESS"
This is what Bezos called "Hogwash."
"Among the news that troubled investors was a dire report by Ravi Suria, a
convertible debt analyst at Lehman Brothers.
Amazon's credit is "extremely weak and deteriorating," Suria wrote, adding that
investors should be wary of the company's bonds.
"We believe that the combination of negative cash flow, poor working capital
management, and high debt load in a hyper-competitive environment will put the
company under extremely high risk," Suria wrote.
" |
