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

To: Candle stick who wrote (3960)	5/5/1998 10:06:00 AM
From: Gary Korn	Read Replies (1) \| Respond to of 164684

NEW YORK, May 5 (Reuters) - Internet companies are drawing investors like jungle mosquitoes, and Tuesday's expected junk bond offering from Amazon.com Inc. embodies both the risk and potential reward offered by the sector, sources said. Amazon is expected to sell $275 million (proceeds) in 10-year senior discount notes with a five-year zero coupon via Morgan Stanley Dean Witter, sources said. Price talk is 10 percent to 10-1/4 percent, sources said. The company is an online retailer of books and music. Last month it posted fourth-quarter revenues of more than $87 million, exceeding Wall Street expectations. MORE Amazon went public last year for $18 per share. By May 1, 1998, it was at 94-1/2, though the company has not yet made a profit. The deal is one in a wave of speculative high-tech issues challenging the analytical skills of junk bond portfolio managers. "It's a company that loses money but has a $2.3 billion market capitalization, and it's a good example of the kind of conceptual stuff that is hitting our market right now," said one of many high-yield fund managers eyeing the deal. MORE "Amazon is one of those sexy growth stories that used to be financed exclusively in the equity markets," the manager said. "Now they're coming to high-yield as well." Investor zeal for Internet-related stock has been no less than staggering, said Doug Forsyth, manager of the Nicholas-Applegate High-Yield Bond Fund. Junk bond investors, though they come ahead of shareholders in the event of a default, should remember that shares can be easier than bonds to unload in times of trouble. MORE "Amazon.com has an interesting business plan, but you have to consider what it might mean to you three years from now if they fail to execute that plan," Forsyth said. "If the share price were to fall from 90 to 60, I'm sure you could still sell your stock," Forsyth said. "But many times there is no liquid market available for high-yield bonds if there is a negative credit event." Also in the junk bond market, Lodestar Holdings Inc. is expected on Friday to sell $190 million in seven-year senior notes via Donaldson Lufkin & Jenrette, sources said.