Amazon.com, Inc. (AMZN) announced that on March 27, 2009, it will redeem all of the remaining principal amount of its outstanding 6.875% Convertible Subordinated Notes due 2010.
The Notes (valued at $388 million) will be redeemed at a redemption price of 100% of the principal amount at maturity, plus accrued and unpaid interest from February 16, 2009 through March 26, 2009.
After completion of the redemption, Amazon will have no debt on the balance sheet and should end 1Q09 with about $1 billion in cash.
This is a significant positive for the stock and makes the company fit more nicely with my thesis that the best stocks to own are those of companies: 1) which are franchise leaders; 2) with significant cash positions; 3) little to no debt; 3) generates strong free cash flows and is self funding; 4) is taking market share as competitors crumble; and 5) have defensible business models.
Full Disclosure: I am long Amazon
Wednesday, February 25, 2009
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