Amazon.com, Inc. (AMZN) Message Board

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

AMZN 229.12

-0.2%

Nov 26 3:59 PM EST

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To: SLN who wrote (37344)	1/28/1999 10:26:00 AM
From: Rob S.	Read Replies (1) of 164684

Let's look at the positive side of this transaction: Amazon will now have about a year's sales in high-interest convertible debt (aprox. 10%). This means that profits will go to pay off the debt for years to come. That's a great thing for investors because it delays the day when there will be real profits to the bottom line. That's good because with no real profits there will be hardly any traditional ways for the company to be judged against other investments. And because it is debt that can be paid off in the future, the company can hide the effects for years. Then there is the prestige of owing $850 million (total). How many young companies can stake that claim? Neither Microsoft or Dell had nearly that much debt when they were only a few years old. Heck, if Microsoft with little debt was worth hundreds of millions four years into it's existence, then Amazon should be worth more than the value of all of Europe due to their more aggressive leveraging. I think all this debt is good. It makes perfect sense to secure the debt while the company is valued at only a few tens of billions - before investors see the stock value rise into the trillions. ! ; ^)

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