Amazon.com, Inc. (AMZN) Message Board

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

AMZN 232.12

+1.6%

Dec 23 3:59 PM EST

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To: GST who wrote (37509)	1/28/1999 8:52:00 PM
From: Circle	Read Replies (1) of 164684

The danger in shorting a stock is the possibility of infinite losses. This convertible caps your potential loss at 157 (though you are exposed again above 200). Meanwhile you're earning a 4.75% coupon plus your short rebate. The convertible will also obviously draw away long-only funds that would have otherwise purchased or held common. You will see some selling of common by mutual funds that are replacing it with the convertible. The idea that this offering is non-dilutive simply because it is "debt" is silly. In fact, once the shorts get control of this stock, Bezos may wish the float was larger. Not to be overly negative, but I also find the use of proceeds (for fully-automated distribution centers) pretty worrisome. These sorts of things generally cost twice as much, take twice as long to build, and work half as well as expected (e.g., the fully-automated baggage sorting fiasco at the Denver airport).

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