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

To: J.S. who wrote (3431)	4/26/1998 11:47:00 AM
From: Mark Myword	Read Replies (1) \| Respond to of 164684

JS - It will be interesting to see the actual details of the new note , as no mention was made in the press release of any equity kicker , convertibility , or other goodies being part of the deal. But as you and others have noted , they snuck this press release out late on a Friday , and they wouldn't be in a hurry to disclose any negative features , now would they ? You are right , I was being very generous to assume only 11.5 % interest , if indeed the note has no kicker attached. I was trying to be kind <g>. With no cash coming their way for five years - this lender is the kind I've been looking for ! Seriously though , there may be more to think about here - this looks like a private placement , possibly an "all-in-the-family " sort of deal that was arranged ( with an investor group or entity friendly to KPCB ) to give Amazon more flexibility (by getting rid of the $75mm note restrictions) and some extra cash to work with at a critical time. With the restrictions gone , or reduced , Amazon can enter into all sorts of agreements , deals-in-the-works , or other moves which will serve to 1) confuse the valuation issue and 2) keep a barrage of press releases flowing that can be spun positively by the I-net press and promoters to keep the stock propped. Go back to December and look at all the announcements for @Home (another KPCB venture) . It was getting pretty silly - every day another strategic alliance or agreement or meeting was announced , featuring name companies , to generate positive spin on the stock , which had been wilting. I expect we'll see the same ploys shortly with AMZN. As a final note , you're absolutely right , the balance sheet is not pretty and will get worse , but apparently that's not a consideration for the type of people who are playing this as a revenue / growth / fantasy angle , not a "do-the-numbers-support-the-price" angle.

To: J.S. who wrote (3431)	4/26/1998 9:40:00 PM
From: Jan Crawley	Read Replies (4) \| Respond to of 164684

I like your comment about this loan being like a giant put option. The lender can eliminate most of the risk then by buying put options on AMZN and may potentially make out on both transactions. Because of position limits on the options exchanges, private arrangement with a big Wall Street firm would have to be arranged. The "discount" could be used to fund these puts. Hi J.S.(and the others), Excellent discussions covered in this weekend's posts here. I have learned a lot. One quick (and maybe not very smart) question regarding to the above discussion / assumption: Would'nt a giant put option (shorting the Amzn stocks) materially affect Amazon's immediate/short/long terms stock prices? Also, is it possible that the debentures may carry a fixed conversion agreement/requirement? Jan P.s. Thanks for the Cube's post; I appreciate the information.