The last time the U.S. economy was headed for a recession,Amazon.com was so deep in debt that some feared the Internet retailer would go under.
Among them was Ravi Suria, then a bond analyst at Lehman Brothers who achieved Wall Street fame with a scathing report on Amazon in mid-2000.
A year earlier, Amazon had tapped the debt markets to raise $1.25 billion in a historic convertible-bond offer, and Suria questioned whether the Seattle company would ever become profitable. Amazon's stock plunged from the $40s to below $10 over the next 18 months.
Today, another recession looms, but Amazon is profitable, and the $1.25 billion convertible-bond issue is no longer: Amazon paid it off in September, nearly five months before a February 2009 deadline.
The company is estimated to report about $475 million in long-term debt when its third-quarter financial results are released later this month. That would be down from $874 million three months ago and translate to 21 cents for every dollar of shareholder equity as of June 30.
"Their financial position is definitely better than it was years ago. No question," said Dan Geiman, an analyst with McAdams Wright Ragen in Seattle. "It's a healthy balance sheet."
....As for Suria, the vocal critic from 2000, he left Lehman in 2001 to work for a hedge fund and now is a private money manager. Reached recently by phone in New York, he said he hasn't "looked at" Amazon for years.
"That was several lifetimes ago," he said.