Amazon.com has bumped up its debts still further by issuing a series of convertible debitures, despite already being heavily in the red.
The online book store confirmed that it has secured $1.25 billion by selling bonds that investors can change for stock. The amount is more than double the figure it had originally been looking for and comes at a time when Wall Street experts are saying the Internet stock balloon could be about to burst (see VNU Newswire, 28 January, 1999).
But Amazon is refusing to say how it plans to spend the money, although analysts believe it is more likely to splurge on a saturation marketing campaign to strengthen its brand rather than fork out on acquisitions.
For its last 1998 quarter, Amazon managed to spend nearly $50 million on marketing itself around the globe, but announced a loss in excess of $17.8 million for the same period.
Its latest debt offering has wooed lenders because it offers a way to cash in stock if prices rocket, yet protect their investment if stock crashes. But the gates were closed to small investors or the public, with the firm opting only to open the beanfeast up to investment banks and insurance companies.
Jeff Bezos, Amazon?s chief executive, also attempted to hobble the company?s inflated share price this week, after it announced a fourth quarter loss. He warned small investors that the firm?s stock was very volatile.
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