Amazon to buy back 3.2% of shares
By Danny King -- Video Business, 2/11/2008
FEB. 11 | Amazon.com said last week it will buy back as much as $1 billion in stock by the end of next year. The world’s largest online retailer also will repurchase about $1.06 billion in debt.
The buyback represents 3.2% of Amazon’s $31.3 billion in market value. As of last Friday, when the company made the announcement, Amazon shares had surged 88% from a year earlier, compared with a 7% drop for the Nasdaq.
Amazon also will repurchase $899 worth of convertible notes due 2009 and 240 million euros ($165.4 million) worth of notes due 2010. The buyback, which replaces a $500 million repurchase plan, accounts for 83% of Amazon’s long-term debt as of Dec. 31.
The company last month said fourth-quarter profit doubled, meeting analysts’ expectations, as sales of electronics and other merchandise surged during the holiday season. The stock fell 4.4% between the Jan. 30 earnings release and the day before the buyback announcement, when Amazon paid $300 million for spoken-word DVD producer Audible.com and became the largest shareholder of European DVD rental subscription service LOVEFiLM International Ltd.
