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  • toycruiser toycruiser Jan 9, 1998 6:45 AM Flag

    earnings report...

    Your observation is compelling. It is my intuition, however, that the recent $60 peak on Dec 31, '97 is the right shoulder position of the head and shoulder formation (head being AMZN all time high of about $65 at the end of October. Also you'll notice more volume on the down curves than up during the recent channel formation....
    Today and perhaps tomorrow would give us a better idea on the development of the future AMZN graph. And guess what? S&P futures down more than 7 points at 6:30 am central. Every index in the world down anywhere from 1/2 to 5% today. DOW dropped 100 pts yesterday but NASDAQ held up pretty well...I think it will be a nasty day in NASDAQ today. I see a losing day for AMZN.

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    • I'm slightly confused. I have calculated Libor + 3.5 to be between 8.75 to 9.25 %. Is that loan shark type rates ? I see junk being floated at 13 % or greater. Please help me with this.


      • 1 Reply to rbco
      • Ron- "spreads" are the difference between somes base rate (like LIBOR, PRIME,or T-Bonds)which borrowers must pay based upon the term(lenght of the loan) and for risk.
        The AMZN loan is a short term bank loan which are typically based on LIBOR.A spread of 3.5% is HIGH and reflects the
        financial risk of AMZN as a startup business with no track record of profits.As I mentioned earlier,BKS borrows at a much lower spread
        of .65 reflecting their financial strength relative to AMZN. Junk bonds are sold LONG TERM(ie, 10 years.)Right now, GOOD junk
        sells for about 3-4 over US Treasuries, or about 8.5-9% for 10 years. I doubt if AMZN could float a junk bond due to their short
        track record and lack of profitability. If the COULD, your'e right it would probably bve in the 12% range.

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