Amazon.com, Inc. (AMZN) Message Board

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

AMZN 230.84

-0.7%

Dec 31 3:59 PM EST

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To: Candle stick who wrote (4038)	5/6/1998 12:33:00 PM
From: Mark Myword	Read Replies (2) of 164684

CS - >> best thing to do is buy the bonds and short the stock. << What you describe is exactly what a convertibles hedge fund would do , if this were a convertible. They would be placing a bet on the bond holding up , and the stock tanking. Pays off handsomely if they're right. The "death-spiral" effect comes into play when the issue is convertible because the funds convert the bonds to cover the shorted stock , which forces the dilution of the common , hence the falling price. TheStreet.com did a piece on this about a month ago. In AMZN's case , this may happen of it's own accord , as you say. There is risk , however , that the bonds will plummet as well , and since you get no coupon in the meantime , you are banking on AMZN remaining a viable business for some time. Place your bets.

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