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Technology Stocks : Amazon.com, Inc. (AMZN) -- Ignore unavailable to you. Want to Upgrade?

To: KeepItSimple who wrote (62725)	6/15/1999 8:06:00 PM
From: Mark Fowler	Read Replies (1) \| Respond to of 164684

It's happened plenty of times before. Just a dead cat bounce.<< You think so? i think the tide will change. Revenues will pale to last yrs. numbers on many of these companies and there ain't a damn thing you can say about it. i think the people who have bought down in here and hung on will make as much a killing as you have going foreword don't underestimate the i-nets.

To: KeepItSimple who wrote (62725)	6/15/1999 8:20:00 PM
From: Glenn D. Rudolph	Respond to of 164684

Lehman questions recent Internet convertibles By Dean Patterson NEW YORK, June 15 (Reuters) - Internet companies have put out a "frenzy" of convertible bonds this year, reflecting their explosive stock prices, but Lehman Brothers on Tuesday expressed doubts about how these bonds will fare going forward. "It is very debatable if they should be in the convertible market," Ravi Suria, the new head of convertible bond research at Lehman Brothers Inc., told reporters. Many Internet convertible issuers have not had to make an interest payment yet, and some may find it difficult to pay interest on their debt without sufficient earnings. "They are not as defensive as regular convertibles. They are not cash-flow rich companies," Suria said, without naming specific companies. Convertible bonds offer investors a way to profit from soaring stock prices, while reaping coupon income. Moreover, their principle is assured if they hold the bonds to maturity. Covertibles generally carry a lower coupon than straight debt because they offer the investor the ability to buy shares at a set price at a later date. Suria and other Lehman officials met with reporters to unveil Lehman's efforts to beef up its convertible bond research services, including a new convertible bond index recently launched. Internet high-flyer Amazon.com Inc. <AMZN.O> set a record in January by selling $1.25 billion of convertible bonds. The issue was increased from a planned $500 million in the face of red-hot investor demand. Orders were more than double what the company actually sold, market sources said at the time. The Amazon.com deal sparked several others, Suri noted. He did not criticize the Amazon.com issue, noting the company is one of the most successful Internet stories. Donough McDonough, head of global convertible bonds and managing director at Lehman, said that in some cases institutional investors required Internet companies to set up funds to bolster the credit quality of their convertibles. To date, Lehman has not underwritten a convertible issue from an Internet company, McDonough said. The convertible bond market is rapidly growing in terms of sophistication and breadth of issuers and investors, Suri said. Convertible bonds offer companies with high-grwoth potential a cost efficient way to raise cash at that point in their development after they have issued stock but before they are readily accepted by straight debt investors, Suri said. Convertibles also offer investors who are required to seek income, such as growth and income mutual funds, a way to play high-growth sectors, such as the Internet, Suri said. Convertibles are rapidly growing in popularity in Europe, where investors have typically tended to buy high-grade debt rather than equity, Suri said. "(European investors) are very comfortable with the structure," Suri said. "It is a great way to wean them off debt markets." A lack of research on convertibles means the market has some of the "last pockets of inefficiency" left in financial markets, and consequently they offer "tremendous pockets of value," he said. A small investor base is one reason why more attention has not been paid to convertibles, Suri said. One reason for this is convertibles have a shorter lifespan than most other investments, Suri said. The average life of a convertible is four years, compared to seven to 10 years for straight debt, Suri said. Equity in theory lives forever, he added. Companies usually issue convertibles in the hope of calling them after a typical three-year non-call period, Suri said. Convertibles tend to trade in lock-step with the stock price when the share price exceeds the conversion price of the convertible. Convertibles tend to trade like similar-quality bonds when the share price is way below the conversion price. Last year saw record issuance of convertible bonds that totaled $40 billion, Lehman officials sa...