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

To: Michael Young who wrote (71664)	8/3/1999 10:09:00 PM
From: Bilow	Respond to of 164684

Hi Michaael Young; About those covering bondholders... I agree that covering their shorts at this time would be kind of strange. It's all about risk adjusted rate of return, and AMZN is way too scary. The basic fact is that when AMZN dropped, the bond prices dropped too. So covering their short would leave them at the mercy of the markets. My guess is that the two instruments have not quite dropped in proportion, there would be some effects due to the interest rates associated with the cash from the short, and the interest on the bond. All in all, it sounds like a cool thing to research. So a bond holder gets to collect interest on the bond, and interest from the cash in his account from short selling. That could add up to a pretty good return for an arb. -- Carl

To: Michael Young who wrote (71664)	8/3/1999 10:10:00 PM
From: Jan Crawley	Read Replies (1) \| Respond to of 164684

These people have no need or desire to cover Why not, if they were short $180, that's over $80 per shares profit. Then they can afford to hold on to their bond holdings for the interest payment....short again later. I am not buying Amzn for keep right now, but am not shorting. I am not shorting coz I don't like the current SI of 15.3M shares.

To: Michael Young who wrote (71664)	8/3/1999 11:24:00 PM
From: Mark Myword	Respond to of 164684

Just look at some old articles regarding how they played BOST. Michael - I actually worked at a convertibles hedge fund about two years ago, while BOST was sinking into the toilet. I still remember overhearing a conversation between the top guy and another trader, regarding BOST, something along the lines of "the equity is worthless" ...they were short a really huge amount. You're absolutely correct, it's a sweet trade. No doubt they feel the same way about AMZN...why cover at $90 when it could go to $9 ? Bill