I think Amazon.com
Not in so many words, of course, but actions always speak louder than press releases anyway. The online retailer and rising cloud-computing star is using some of its $3.7 billion of cash equivalents to pay off some of its outstanding long-term debt securities.
240 million Euros of convertible notes stand between Amazon and a virtually debt-free balance sheet today. A rising dollar has lowered the dollar value of that debt from $358 million at the end of 2007 to a svelte $307 million today. No bondholder in their right mind will convert these papers into stock -- that would be like paying $108 for a stock that's trading at less than $64. So in the future, Amazon's diluted share count will be very close to the plain old "shares outstanding." Let's hear it for anti-dilution!
The timing of this early repayment has me thinking that Jeff Bezos and his crew feel the market bottom getting closer -- close enough to pay off this last chunk of debt.
Replacing this borrowed capital with a new loan sure wouldn't be easy these days, when you can get shares of Bank of America
In other words, this inveterate management team can't imagine that the dollar would get much stronger than it is today. That's tantamount to calling a market bottom. When the economy suffers from a credit freeze and low liquidity, which sounds a lot like the current situation, you worry more about deflation than inflation -- so the dollar should be at its strongest when the night is at its darkest.
Now, I'm not comparing Jeff Bezos to economic oracles like Berkshire Hathaway
Dredging the Foolish bottom of the market:
Berkshire Hathaway is a Motley Fool Inside Value selection. Berkshire and Amazon.com are Motley Fool Stock Advisor recommendations. The Fool owns shares of Berkshire Hathaway. Try any of our Foolish newsletters today, free for 30 days.
Fool contributor Anders Bylund holds no position in any of the companies discussed here. You can check out Anders' holdings or a concise bio if you like, and The Motley Fool is investors writing for investors.