Mark, that note you posted is an April press release announcing
a private placement of $275 mil. in "Discount Notes". Since then,
Amazon has replaced those notes with pubilcly listed notes with
about $325 mil. face value. The lengthy disclosure is at:
www4.edgar-online.com
The notes are discount notes which (I think) means that in 2008,
an actual principal amount of 530 mil. is due (about a 40% discount).
In return, Amazon, doesn't pay interest until 2003, and then it
pays 10% (don't know whether it is 10% of the 325 mil. figure
or the 530) in semi-annual payments, out to 2008. Then, the full
530 mil. is due. (to any CPA/MBA that has the patience to go through
the disclosure, I'd like to hear your reading on this junk bond
offereing).
In June, Amazon also filed to sell up to 5 mil. shares at approx.
$40/share on an as needed basis, mainly for acquisition purposes.
I don't know how that works ... but if they haven't sold the 5 mil.
shares yet, I'd expect them to do so really soon. The URL for that
filing is:
www4.edgar-online.com
This will bring total shares outstanding to about 55 million, and
possibly increase the float up to about 20 mil. shares (currently
about 15 mil.).
I don't know who has been buying AMZN at > $100/share, but with the
over-heated valuation, and the debt level, I keep wondering why the
institutions (assuming they're doing the buying) are stepping
up to the plate at these prices. Kinda expensive window dressing.
My favorite conspiracy theories are:
1. the aggressive buying might be options related. Perhpas some
institutions bought calls, and want to protect their winnings.
Maybe market makers were short calls, and had to buy stock to
cover.
2. crazy idea: Amazon is going to get an exclusive to sell
Microsoft's software on the net (just kidding - but I can't think
of any other reason that would come close to justifying
Amazon's recent run up).
3. less outrageous idea: Scott Clark, ex-Intuit founder is the
senior VP at Amazon. Maybe they have some wild merger with Intuit
up their sleeve. Don't see how that would double Amazon's market
cap. in one short month though. |
