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

To: KeepItSimple who wrote (74337)	8/17/1999 9:56:00 PM
From: Sabrejet	Read Replies (1) \| Respond to of 164684

The chances of "Bozo" getting this mule to 156 for 20 days in the short term is NONE. Quite paranoid! Question, do you sleep at night with one eye open??? Sabre!

To: KeepItSimple who wrote (74337)	8/18/1999 1:57:00 AM
From: Bilow	Respond to of 164684

Regarding the conversion of AMZN debt into stock. The $156 figure does not apply: Hi KeepItSimple, Sabrejet; AMZN needs $234 stock to force bond conversion. The $156 price is what they would be converted at, giving the bondholders $1500 worth of stock for every $1000 face of bond. Here are the details: SECTION 3.1 (a) PROVISIONAL REDEMPTION BY THE COMPANY. The Notes may be redeemed by the Company (a "Provisional Redemption"), in whole or in part, at any time prior to February 6, 2002, upon notice as set forth in Section 3.2, at a redemption price equal to $1,000 per Note to be redeemed plus accrued and unpaid interest, if any (including Liquidated Damages Amount, if any), to the date of redemption (the "Provisional Redemption Date") if (i) the closing price of the Common Stock shall have exceeded 150% of the Conversion Price then in effect for at least 20 Trading Days in any consecutive 30-Trading Day period ending on the Trading Day prior to the date of mailing of the notice of redemption pursuant to Section 3.2 (the "Notice Date") and (ii) the shelf registration statement covering resales of the Notes and the Common Stock issuable upon conversion of the Notes is effective and available for use and is expected to remain effective and available for use for the 30 days immediately following the Provisional Redemption Date. Upon any such Provisional Redemption, the Company shall make an additional payment in cash (the "Make-Whole Payment") with respect to the Notes called for redemption to holders on the Notice Date in an amount equal to $212.60 per $1,000 Note, less the amount of any interest actually paid on such Note prior to the Notice Date. The Company shall make the Make-Whole Payment on all Notes called for Provisional Redemption, including any Notes converted into Common Stock pursuant to the terms hereof after the Notice Date and prior to the Provisional Redemption Date. In the appendix: ... convert the principal hereof or any portion of such principal which is $1,000 or an integral multiple thereof into that number of shares of the Company's Common Stock, as said shares shall be constituted at the date of conversion, obtained by dividing the principal amount of this Note or portion thereof to be converted by the Conversion Price of $156.055 or such Conversion Price as adjusted from time to time as provided in the Indenture ... edgar-online.com Therefore, for AMZN to force conversion, they have to get the stock price up to $156 * 1.50 = $234 for 20 of 30 trading days. It is of some interest to ascertain what effect such a conversion would have on the company, and the float... The convertible consists of $1.25B, so the $212.60 "make whole" payment that applies to company forced conversion before 2002 would cost AMZN $265MM. At a conversion rate of $156.055 per share, a little over 8MM shares would be created. The current float is 65.8MM, so dumping 8MM more shares into the pot would probably depress prices somewhat. As far as cash costs, AMZN has something like $1.1B in the bank, so they could afford the make whole payment. But the company is still burning cash pretty fast, and may want to keep some of it so they can pay off the auctioneer at the bankruptcy. -- Carl