Software, Digital Content, Geopolitics, Economics & More from of a Libertarian Serial Expat and Entrepreneur
In: finance & money6 Feb 2002
"The fact is, the weak euro–which lowered Amazon’s interest payments on its debt by a full $16 million–accounted for a good bit of the company’s surprise performance, rather than stellar operating margins or the triumph of the kitchen appliance business. Without this gain, as Amazon openly acknowledged in its earnings release, the company would have posted a net loss of $11 million."
Indeed. From Amazon.com’s latest 10K: "We may be adversely affected by foreign currency exchange rate risk. Our 6.875% Convertible Subordinated Notes due 2010 ( 6.875% PEACS ) are denominated in Euros, not U.S. dollars, and the exchange ratio between the Euro and the U.S.dollar is not fixed by the indenture governing the 6.875% PEACS."
02/21/04 update: with the steep decline of the dollar, this is still interesting to follow up. Of course in the short term Amazon is making more dollars out of its European sales, but they’re also paying more interests on that debt, plus they stopped their currency swap so they’re exposed to more volatility. I guess they know what they’re doing, I’m out of my depth here. See their 2003-09-30 10-Q.
I'm CEO of an online trade publishing firm in the marketing and defense verticals. We try to make news and data digestible and useful in an environment that is more noisy each day. This personal blog mixes my thoughts and interests on politics, business, software, and more, based on my business and personal experiences. Over the years I have posted items that turned out spectacularly wrong, and a few posts that stood the test of times better. Personal views only.