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

To: Glenn D. Rudolph who wrote (37558)	1/28/1999 11:45:00 PM
From: larry oertel	Read Replies (1) \| Respond to of 164684

A quote from Mr. C.P. Kindleberger I thought this wise Historians observation was appropriate for these times: "There is nothing so disturbing to one's wellbeing and judgement as to see a friend get rich"

To: Glenn D. Rudolph who wrote (37558)	1/29/1999 8:16:00 AM
From: tonyt	Read Replies (1) \| Respond to of 164684

Amazon issues convert's. Who would have thunk it :o) WSJ: "Amazon.com launched a $1.25 billion convertible-bond offering and found strong demand among bond buyers seeking Internet investments." Amazon.com Launches Convertible-Bond Issue By GREGORY ZUCKERMAN and GEORGE ANDERS Staff Reporters of THE WALL STREET JOURNAL The Internet craze is starting to spill over to other markets. Champing at the bit to get their hands on the kinds of Internet investments that have created such wealth for stock investors, convertible and bond buyers joined equity investors in eagerly scooping up a $1.25 billion convertible-bond offering from Amazon.com Inc., the largest U.S. convertible-bond offering ever. As the day began, Amazon.com was slated to sell $500 million of the convertible bonds. But strong investor demand led the Seattle company's underwriter, Morgan Stanley Dean Witter & Co, to boost the private offering to the $1.25 billion level. The Amazon.com subordinated notes, due 2009, were priced at a 4.75% yield. The notes will be convertible into common shares at $156.05 a share, representing a conversion premium of 27% of Thursday's closing price. In other words, investors are willing to accept a slim 4.75% yield for the option of buying Amazon.com shares at $156.05. On the Nasdaq Stock Market yesterday, shares of Amazon.com closed at $122.875, down $2.75, or 2.2%, on composite volume of 11.9 million shares. Like any other convertible bond, the notes will be converted into Amazon.com shares at the investor's choosing. The company can redeem the bonds at any time in the first three years if the stock trades above $234, or 50% above the conversion price. After three years, the bond can be called at any time. "It's a great deal if Amazon keeps going up, but 4.75% isn't much to be paid for a crummy credit," said Steve Seefeld, the president of Convertbond.com, an online analysis service. Amazon.com declined to say how it plans to use proceeds from the offering. Earlier this week, the company told investors that it plans to spend heavily this year on marketing and improved distribution facilities. The retailer is building an automated warehouse in Fernley, Nev., to handle books and other goods it sells online. But those internal projects aren't likely to consume the bulk of the money raised Thursday, said Fritz Linkler, an investment manager at Husic Capital Management Co., San Francisco, which is a major Amazon.com shareholder. Instead, Mr. Linkler said, he believes that the bond offering "will give Amazon flexibility to buy a wider range of companies." Some potential sellers may want cash instead of Amazon's surging but volatile stock, he noted. The money raised in the bond offering will make it easier for Amazon.com to pay whatever blend of stock and cash target companies might want. Amazon.com also could use the money to build warehouses abroad, where it is expanding rapidly, Mr. Linkler said. The company has yet to turn a profit, but its balance sheet remains highly liquid, thanks to a zero-coupon bond offering last May that raised $325 million. As of Dec. 31, Amazon.com had $373 million in cash and marketable securities. Amazon.com's latest bond offering is a record-setter in terms of proceeds raised for a U.S. convertible-bond deal, eclipsing $1 billion offerings by Home Depot Inc. in 1996 and Loews Corp. in 1997. But several other convertible-bond offerings, involving deeply discounted securities, have involved larger amounts due at maturity. The biggest of those, according to Securities Data Co., was a $3.2 billion offering by Eastman Kodak Co. in 1991.