Bezos & Co. has authorized a debt repurchase program that it may repurchase, redeem or retire, up to all of its outstanding 4.75% convertible subordinated notes due 2009 with an outstanding balance of $899 million in principal; and it can repurchase, redeem, or retire its 6.875% convertible subordinated Notes due 2010 that has a currency converted balance of some $350 million or so outstanding. This debt repurchase authorization will replace a February 2006 $500 million debt repurchase authorization.  The debt matures next year and the year after, so it will probably just allow these to mature without replacing them. 

But Bezos & Co. is also announcing a $1 Billion share buyback plan over the next 24-months, which will replace the existing $500 million stock buyback plan put in place in April 2007.

While Amazon stock has pulled back some 30% from its 2007 highs of $101.09, this stock is actually up roughly 75% off of its lows and up 130% or so from lows over the last two-years. 

Are there no acquisitions out there that can be made with that $1 Billion?  With a forward P/E ratio for 2008 of 45 and with a near-$30 Billion market cap it can almost certainly find attractive buyout targets that would add another growth driver and simultaneously take out competition.

Taking away debt.. that’s good.  But at $70.00 a $1 Billion buyback wouldn’t even be a day and half of average share trading volume. 

Dear Mr. Bezos, kill the debt.  But kill the stock buyback too.

Jon C. Ogg
February 8, 2008

Analysts have fairly aggressive price targets on Amazon with an average north of $98.00.  We’d note that shares have traded as low as $36.63 and as high as $101.09 over the last year.  Up until the last pullback this has spent most of the last four months in an $80 to $100 trading band, although we’d caution that $95 or so was the top of that band on all but one day.  Shares have also been hanging out for the last week or more under the 200-day moving average, which was $78.72 on last look.

Options are almost impossible to use for a predicting tool today with a high VIX, high event risk, and high volatility.  If you want a guess at options as a prediction, options traders appear to be braced for a move of more than $7.25 in either direction.  The short interest is also a must-see ahead of earnings, and as of mid-January the short interest was 31.4+ million shares (up 1.5% from December-end).

We do not know if Bezos & Co. will go out on a limb and offer any targets for 2008.  But we are fairly certain that 2007 will be an important benchmarking for analysts as they try to come up with 2008 targets.  Even with the recent sell-off we’ve seen, it doesn’t look like the analysts are going to line up in defense of Amazon.com if it makes any comments that are overly cautious ahead. 

If the company meets the 2007 target, its trailing P/E ratio will be 66.  With a target of $1.63 expecting almost 45%  earnings growth, this forward P/E ratio is still 45.3 for 2008 targets.  Sometimes valuations do matter, particularly when you are teetering on a recession or a bear market.

Jon C. Ogg
January 30, 2008 

Availability: Temporarily out of stock. Order now and we’ll deliver when available. We’ll e-mail you with an estimated delivery date as soon as we have more information. Your credit card will not be charged until we ship the item. Ships from and sold by Amazon.com. Gift-wrap available.
Kindle Availability:  Due to heavy customer demand, Kindle is temporarily sold out. Because we ship Kindles on a first-come, first-served basis, please ORDER NOW to reserve your place in line. Your Kindle will not arrive by December 25th. Note that Kindles cannot currently be sold or shipped to customers living outside of the U.S.

But there is at least one place you can buy the Kindle.  eBay (NASDAQ:EBAY) has many Kindle units on auction, for quite a premium.  As of now and depending upon the seller’s rating at eBay, the bids are in excess of $600, $700, and even over $800….. not bad for the seller considering that this retails at Amazon.com for $399.00 for those who can be patient for yet a few more weeks.

Walt Mossberg at the WSJ only gave Kindle a so-so review.  You can always buy the ‘lower-features’ eBook reader from Sony Corp. (NYSE:SNE/ADR) for $299.95… and you can buy it on Amazon.com.

Jon C. Ogg
December 4, 2007

Kindle Availability: "Due to heavy customer demand, Kindle is temporarily sold out. Because we ship Kindles on a first-come, first-served basis, please ORDER NOW to reserve your place in line. See availability messaging above for estimated in-stock date."  Availability: In stock on December 5, 2007.

Sony has had one of these out for some time, and it has barely registered as a footnote in the grand scheme of things as Sony.  Sony’s Reader Digital Book is less robust than Kindle and has been on the market much longer, and it costs $299.99.  Sony has also had promotion of 100 free e-book offers for e-book reader purchases between August 4, 2007 and January 31, 2008.  Amazon’s Kindle reader is $399.00, but it acts more like a portable written media device as it allows newspapers, blogs, and more to be connected wirelessly through the same high-speed data network (EVDO) as advanced cell phones.

Jon C. Ogg
November 23, 2007

Wal-Mart is one of the first major retailers to offer MP3 digital tracks with music content from major record labels such as Universal and EMI Music, and the launch is aimed to get into the space of Apple (NASDAQ:AAPL) and Amazon.com (NASSDAQ:AMZN).  Wal-Mart’s new MP3 music catalog includes hundreds of thousands of songs and albums, and will be continually expanded with additional mainstream and independent music content. Also, Wal-Mart is currently offering special MP3 album pricing on hundreds of album classics.

It used to be that once Wal-Mart went after your space that things became instantly worse for you and your other competitors.  But after the Wal-Mart woes of late, they just don’t seem able to wrangle away customers at the same rate.  In fact, many may now chuckle at new initiatives because its online presence is still too small to be a major factor.

Steve Jobs and Jeff Bezos probably didn’t call each other up in a panic this morning, and probably won’t be tomorrow either.  These stocks are even higher on the heels of RealNetworks (NASDAQ:RNWK) launch of a new digital music company with MTV.  We addressed this earlier today.  If these were as threatening as they sound then Amazon.com (AMZN) shares might not be up 3.8% and Apple (AAPL) shares might not be up 4% today.  Getting the huge established tech predators unseated from a dinner table at their favorite restaurants usually takes more than getting a two-top table in the corner.

Jon C. Ogg
August 21, 2007

Jon Ogg can be reached at jonogg@247wallst.com; he does not own securities in the companies he covers.