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

To: Bill Harmond who wrote (63170)	6/17/1999 9:47:00 PM
From: Lizzie Tudor	Respond to of 164685

Two million? Wow, that KIS is a player. Not only that, it was a pure options (short term) transaction. Wow, what a bold strategy. Who needs a long term portfolio when you know you are right I guess.

To: Bill Harmond who wrote (63170)	6/17/1999 10:37:00 PM
From: Glenn D. Rudolph	Respond to of 164685

Investment Highlights: * Amazon.com has announced a ten year “strategic auction alliance” with Sotheby's. We view this as a positive for AMZN, rated Accumulate/Buy. * We continue to recommend the AMZN convertible as a Total Return alternative and we have included it in our Convertible Model Portfolio. * The bond offers a 2:1 risk/reward ratio and nearly three years of provisional call protection plus a make-whole payment if called during the provisional period. Amazon.com 4.75% 2/1/09 Amazon.com (AMZN/$111-11/16; D-2-1-9) and Sotheby's announced a ten-year “strategic auction alliance” yesterday that will feature a joint online auction site called sothebys.amazon.com. We view this as a positive for Amazon.com. The joint site, expected to launch later this year within the Amazon.com auction site, will sell coins, stamps, antiques and other collectibles. It is expected to launch with an auction of items from the Halper Collection of baseball memorabilia. The alliance will allow Sotheby's' 2,800 dealers to reach more potential bidders and Amazon.com's 10 million customers to have more and higher quality objects to bid on. Sotheby's will contribute its reputation and expertise in sourcing and authenticating art and valuable objects. Amazon.com will make a $45 million investment in Sotheby's and contribute proven online technology, superb customer service and the largest number of e-commerce customers in the world. Although the financial details of the agreement weren't released, we believe the companies will share revenue generated through the auctions. (H. Blodget 6/17/99). The Amazon.com 4-3/4s are included in our Convertible Model Portfolio as a Total Return alternative. We continue to recommend them in view of a discount valuation, 2:1 risk reward ratio and strong call protection. The bond closed yesterday at 92-1/8 for a 28.7% conversion premium and a 5.2% current yield. We estimate the discount to theoretical value at 2.4% using model inputs of 40% annualized stock volatility and a credit spread of 540 bps over the ten year Treasury. Our one-year total return projections are +16.6%/-8.5% in response to a price change by the common of +/-25%. Provisional call protection extends to 2/5/02 (NC unless AMZN is at lest $234.08) and investors receive a make-whole payment of $212.60 per $1,000 face amount if called within the provisional period. (6/17/99) Bulletin United States 17 June 1999 T. Anne Cox, CFA First Vice President Preston M. Harrington III First Vice President Today In Convertibles AMZN Merrill Lynch & Co. Global Securities Research & Economics Group Global Convertibles Research Group RC#11316801 Convertibles