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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: 16yearcycle who wrote (53685)4/29/1999 1:16:00 AM
From: Al Chechatka  Read Replies (1) of 164684
 
What bothered me over the weekend was the potential of the Bond conversion at above 230 because they would have had 1 billion dollars of free money. Even though it would have diluted the company, its balance sheet would have had little debt and tons of cash for acquistions. And since the first convertible was so successful, there would have been another with probably even more favorable rates for the company. That was the good news.

But now it has changed 180 degrees. The stock will no longer challenge that number (at least not this week). But if sentiment starts looking negative as far revenue growth and long term no profits, then we are in for some trouble with the stock. They have to start paying back these loans in 2003. "They should make 100 million a year by 2003," you say to yourself, but that just pays the debt! They have to make money to further expand their growth.

Good things can happen as well. The Internet stocks can continue its crazy run long enough for the companies that AMZN invested in .ie Drugstore.com and others to get bought out or go public. That will generate huge cash for them.

What the story said in tonights conference call is AMZN is bleeding money and will continue to bleed money for time to come. It may be ignored...it may burst the bubble, it may do a soft landing (my bet) like in Feb and then get analyst coverage that makes it go up 50% in 3 days.

Al C.

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