>In other online shopping news, Ashford.com obtained a three-year, $25 million revolving credit
line from Congress Financial Corp., a division of First Union National Bank.
Glenn, I guess you where wrong about Ashford. Ashford gets another $25 million?
James,
I was aware of this line of credit offer since last July. It closed recently is all. However, there are a lot of stipulations on this loan compared to none for the junk bonds that Amazon issued.
The loan granted to Ashford.com has collateral of all Ashford.com inventory much of which is jewelry. Jewelry does not easily become a write-down such has fashion items like clothing, toys (maybe not fashion here) and other items. If the jewelry is composed of diamonds and mountings and the style is no longer in demand, one is only out the labor. Loose diamonds are never a problem, etc.
Anyhow the collateral value may not drop below twice the value of the loan as I have heard but cannot confirm. If this occurs, the loan is called, the inventory liquidated and the shareholders are left with nothing. In the meantime, the bank has a safe interest bearing loan it issued.
.Amzn can always get another $billion
from Paul Allen, John Malone, or Prince Alwaleed.
This is a different issue and the amount Amazon can raised has surprised me twice in the past. That just extends the time until they fold is all.
Glenn |
