Amazon.com, Inc. (AMZN) Message Board

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Technology Stocks : Amazon.com, Inc. (AMZN)

AMZN 233.95

+0.3%

Dec 1 3:59 PM EST

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To: Tom D who wrote (3426)	4/25/1998 11:14:00 PM
From: Gary Korn	Read Replies (5) of 164684

Either the management is irrational, OR these actions are part of a bigger plan that we cannot see at this point in time. Tom, I think AMZN management rationally determined that, given its current burn rate and lack of profits, they simply will not have $75MM cash to pay-off a $75M balloon in 32 months, and further that it would be easier if they did not also have to pay about $1.5M in interest every quarter. Therefore, I think that they paid (in terms of higher interest and a higher total obligation) for the opportunity to put off the balloon payment and to put off interest payments. Perhaps management has concluded that a secondary offering (raising cash through share issuance) would hurt the stock price more than will the new debt-deferral plan (even though that plan is quite costly). Gary Korn Gary Korn

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