You may not be ready to dive into Amazon.com (Nasdaq: AMZN) at today's prices, but the company has no problem belly-flopping into its own wide mouth.

Amazon announced expanded debt and share repurchases this morning, a move that may find the company buying back all of its $1.3 billion in long-term convertible debt and as much as $1 billion worth of its outstanding shares.

The e-tail leader is good for the money. It started out the year with $2.5 billion in cash and short-term investments. This isn't the sniveling, leveraged Amazon that spooked investors when the dot-com bubble popped earlier this decade. The company's now a cash-creating beast, cranking out consistent profits even during the non-holiday periods when other, conventional retailers see red. Even after accounting for its pending purchase of Audible (Nasdaq: ADBL), Amazon is good for the money.

In other words, the real question isn't if it can do it: It can. Nor is the real question will it do it? Just because a company announces buybacks doesn't obligate it to carry through with the repurchase. No, the real question is: Should investors follow suit?

Amazon bears don't think so.

Don't back up a truck with overinflated tires
American Technology Research analyst Tim Boyd reiterated his sell rating on Amazon's stock this morning, suggesting that the shares are still pricey despite the recent pullback. 

"To repurchase stock at these levels strikes us as a highly circumspect use of capital," he wrote this morning.

Boyd has no problem with the debt-repurchase part of the deal. It's a smart move to retire the company's convertibles, given the inverted yield curve, he said.

The stock buyback is altogether different. Historically, it sends a message to investors that a company believes its stock is cheap. Even bulls would have to concede that Amazon isn't going to wiggle its way into value-investor portfolios at this point. The e-tailer's stock may have fallen by nearly 30% since peaking four months ago, but it's still trading at lofty multiples.

Amazon closed yesterday at 63 times last year's earnings and 46 times this year's projected profitability. Those are big numbers, but bulls, naturally, will argue that Amazon is more than worth it.

Those tires are just fine
Earnings at Amazon more than doubled last year. The pros expect profits to climb 38% this year, and another 37% come 2009. If the multiples are big numbers, so are Amazon's growth spurts.

In fact, if we go out to next year, Amazon's P/E multiple drops to just 33. Paying 33 times next year's earnings for a stock expected to grow its earnings per share by 37% that year is compelling. It's not dirt cheap, but it's suddenly not so outlandish.

One wonders, though: How will Amazon hold up if recessionary pressures continue?

This one could go either way. If discretionary spending dries up, there will be less money to go around for the feel-good items Amazon sells. However, Amazon's prices -- typically lower than local chains, especially if Amazon foots the shipping costs -- are attractive. Home delivery is convenient, especially if, in a recessionary climate that's coupled with buoyant crude oil prices, shoppers choose to stay home when they shop.

Amazon may sell fewer iPods and video game consoles in an economic lull, but the company also continues to expand its grocery and value-priced apparel offerings.

Amazon's resurgence has been the handiwork of accelerating growth, and it's gaining that ground at its rivals' expense. Whether it's battling online against an Overstock.com (Nasdaq: OSTK) or a Bluefly (Nasdaq: BFLY), or out in the real world against Circuit City (NYSE: CC) or DSW (NYSE: DSW), Amazon is winning the market-share war.

Companies repurchase shares because they think the shares will be worth more later. That kind of vision isn't flawless. Sucker companies sometimes buy back stock all the way down.

Amazon is not in that camp. We need to sit through the next few quarters before we can know whether Amazon is recession-resistant. Heck, we need to wait that long to see whether Amazon is serious about its aggressive repurchase plans.

Even bears would be wrong if they think Amazon will head backwards anytime soon. The company has come too far -- and amassed a growing list of repeat shoppers for too long -- to suddenly wake up stupid tomorrow.

If Amazon is backing up the truck, who am I to fight the flow? I don't have a truck, but I do have a wheelbarrow. Will that do?      

A Foolish trip up the Amazon:

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Longtime Fool contributor Rick Munarriz wonders if backing up the truck comes with beeps if you get too close to an obstacle. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early. He does not own shares in any of the companies in this story. The Fool has a disclosure policy.